The inverse demand function for cases of whiskey defined by p = 186 - 6q, and the inverse supply function is defined by p = 90 + 2q. Originally there was no tax on whiskey. Then the government began to tax suppliers of whiskey $32 for every case they sold. How much did the price paid by consumers rise when the new equilibrium was reached?

Question

Quizplus · Accepted Answer

The tax shifts the supply curve up by $32, leading to a new equilibrium where the price paid by consumers rises by $24.

The Inverse Demand Function for Cases of Whiskey Defined by P