Suppose the market demand function for ice cream is and the market supply function for ice cream is ,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 change in producer surplus due to the tax is
A) $1.80
B) $1.20
C) $1.00
D) $0.48

Question

Suppose the market demand function for ice cream is  and the market supply function for ice cream is  ,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 change in producer surplus due to the tax is
A) $1.80 
B) $1.20 
C) $1.00 
D) $0.48

Quizplus · Accepted Answer

The Answer is C

Suppose the Market Demand Function for Ice Cream Is