In the market for widgets,the supply curve is the typical upward-sloping straight line,and the demand curve is the typical downward-sloping straight line.The equilibrium quantity in the market for widgets is 250 per month when there is no tax.Then a tax of $6 per widget is imposed.As a result,the government is able to raise $750 per month in tax revenue.We can conclude that the after-tax quantity of widgets is
A)75 per month.
B)100 per month.
C)125 per month.
D)150 per month.

Question

Quizplus · Accepted Answer

The tax revenue is $750, and the tax per widget is $6, so the after-tax quantity is $750 / $6 = 125 widgets per month.

In the Market for Widgets,the Supply Curve Is the Typical