Figure 8-13
-Refer to Figure 8-13.Suppose the government places a $5 per-unit tax on this good.The amount of tax revenue collected by the government is
A)$120.
B)$80.
C)$50.
D)$30.

Question

Figure 8-13 
-Refer to Figure 8-13.Suppose the government places a $5 per-unit tax on this good.The amount of tax revenue collected by the government is
A)$120. 
B)$80. 
C)$50. 
D)$30.

Quizplus · Accepted Answer

The tax revenue is calculated by multiplying the tax per unit ($5) by the quantity sold after the tax is imposed (20 units - 10 units). Therefore, tax revenue = $5/unit x 10 units = $50.

Figure 8-13 -Refer to Figure 8-13.Suppose the Government Places a $5 Per-Unit