Figure 17-2 shows a demand curve and two sets of supply curves, one set more elastic than the other.
-Refer to Figure 17-2. If the government imposes an excise tax of $1.00 on every unit sold, the government's revenue from the tax
A) is larger if the supply curve is S0.
B) is larger if the supply curve is S1.
C) is identical under either supply curve.
D) is not maximized.

Question

Figure 17-2 shows a demand curve and two sets of supply curves, one set more elastic than the other.
-Refer to Figure 17-2. If the government imposes an excise tax of $1.00 on every unit sold, the government's revenue from the tax
A) is larger if the supply curve is S0. 
B) is larger if the supply curve is S1. 
C) is identical under either supply curve. 
D) is not maximized.

Quizplus · Accepted Answer

The Answer of 
 
Figure 17-2 shows a demand curve and two sets of supply curves, one set more elastic than the other.
-Refer to Figure 17-2. If the government imposes an excise tax of $1.00 on every unit sold, the government's revenue from the tax
A) is larger if the supply curve is S0. 
B) is larger if the supply curve is S1. 
C) is identical under either supply curve. 
D) is not maximized.

Figure 17-2 Shows a Demand Curve and Two Sets of Supply