Figure 8-3

-Refer to Figure 8-3.What is the amount of tax revenue received by the government
A)$210
B)$420
C)$560
D)$980

Question

Figure 8-3
 
-Refer to Figure 8-3.What is the amount of tax revenue received by the government
A)$210 
B)$420 
C)$560 
D)$980

Quizplus · Accepted Answer

The tax revenue received by the government is equal to the area of the rectangle formed by the intersection of the supply and demand curves at the equilibrium price. This rectangle has a height of $7 and a base of 140 units of the product, which gives a tax revenue of $980 (7 x 140 = 980). Therefore, the correct answer is D.

Figure 8-3 -Refer to Figure 8-3.What Is the Amount of Tax Revenue