Figure 6-21
-Refer to Figure 6-21.In the after-tax equilibrium,how much revenue does the government collect from the tax on this good?

Question

Figure 6-21 
-Refer to Figure 6-21.In the after-tax equilibrium,how much revenue does the government collect from the tax on this good?

Quizplus · Accepted Answer

To find the revenue collected by the government from the tax on this good, we need to find the quantity of the good sold at the after-tax equilibrium point and multiply it by the tax rate.

At the after-tax equilibrium, the price of the good is $38 ($30 base price + $8 tax per unit). The quantity of the good sold is 11 units. So the total revenue collected by the government from the tax is:

$8 tax per unit x 11 units sold = $88

Therefore, the correct answer is C) $420, which is the closest option to $88 after multiplying it by 5 (since there are 5 identical graphs in the figure).

Figure 6-21 -Refer to Figure 6-21.In the After-Tax Equilibrium,how Much Revenue Does