(Advanced analysis)The equations for the demand and supply curves for a particular product are P = 10 − 0.4 Q and P = 2 + 0.4 Q, where P is price and Q is quantity expressed in units of 100. After an excise tax is imposed on the product, the supply equation is P = 3 + 0.4 Q. Government's revenue from this tax is

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The government's revenue from the tax can be calculated by finding the difference in the intercepts of the original and new supply equations, which represents the tax per unit, and then multiplying it by the quantity sold after the tax is imposed. First, find the equilibrium quantity and price before the tax:Set the original demand and supply equations equal to each other to find the equilibrium quantity (Q):$$10 - 0.4Q = 2 + 0.4Q$$$$8 = 0.8Q$$$$Q = 10$$Now, insert the new supply equation (after tax) into the equilibrium condition with the demand equation to find the new equilibrium quantity:$$10 - 0.4Q = 3 + 0.4Q$$$$7 = 0.8Q$$$$Q = 8.75$$The tax per unit is the difference in the intercepts of the original and new supply equations, which is $1 ($3 - $2). The quantity sold after the tax is imposed is 8.75 units (of 100). Therefore, the government's revenue from the tax is:$$8.75 \times 100 \times 1 = \$875$$Thus, the correct answer is $875.

(Advanced Analysis)The Equations for the Demand and Supply Curves for a Particular