Solved

Suppose the Market Demand Function for Ice Cream Is Qd

Question 3

Multiple Choice

Suppose the market demand function for ice cream is Qd = 10 - 2P and the market supply function for ice cream is Qs = 4P - 2,both measured in millions of gallons of ice cream per year.Suppose the government imposes a $0.50 tax on each gallon of ice cream.The producer surplus after the tax is:


A) $3.56 million.
B) $4.50 million.
C) $1.89 million.
D) $7.11 million.

Correct Answer:

verifed

Verified

Related Questions

Unlock this Answer For Free Now!

View this answer and more for free by performing one of the following actions

qr-code

Scan the QR code to install the App and get 2 free unlocks

upload documents

Unlock quizzes for free by uploading documents