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Suppose a Tax of $3 Is Imposed on Each New

Question 196

Multiple Choice

Suppose a tax of $3 is imposed on each new garden hose that is sold,resulting in a deadweight loss of $22,500.The supply curve is a typical upward-sloping straight line,and the demand curve is a typical downward-sloping straight line.Before the tax was imposed,the equilibrium quantity of garden hoses was 100,000.We can conclude that the equilibrium quantity of garden hoses after the tax is imposed is


A) 75,000.
B) 85,000.
C) 90,000.
D) 95,000.

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