Suppose the price of gasoline is $3.50 per gallon, the quantity of gasoline demanded is 150 billion gallons per year, the price elasticity of demand for gasoline is -0.06, and the federal government decides to increase the excise tax on gasoline by $1.00 per gallon, which increases the price of gasoline by $0.75 per gallon.How much revenue does the federal government receive from the tax?
A)$95.44 billion
B)$111.20 billion
C)$148.27 billion
D)$161.61 billion

Question

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The Answer of Suppose the price of gasoline is $3.50 per gallon, the quantity of gasoline demanded is 150 billion gallons per year, the price elasticity of demand for gasoline is -0.06, and the federal government decides to increase the excise tax on gasoline by $1.00 per gallon, which increases the price of gasoline by $0.75 per gallon.How much revenue does the federal government receive from the tax?
A)$95.44 billion
B)$111.20 billion
C)$148.27 billion
D)$161.61 billion

Suppose the Price of Gasoline Is $3