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 aggregate surplus with the tax is:
A) $7.11 million.
B) $3.56 million.
C) $13.50 million.
D) $10.67 million.
Correct Answer:
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Q6: Suppose the market demand function for ice
Q7: An ad valorem tax:
A) is a fixed
Q8: Suppose the market demand function for ice
Q9: Suppose the market demand function for ice
Q10: More of a tax is borne by
Q12: The incidence of a tax:
A) falls entirely
Q13: Suppose the market demand function for ice
Q14: There is no deadweight loss from a
Q15: Suppose the market demand function for ice
Q16: A specific tax:
A) is a fixed dollar
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