Table 12-1
-Refer to Table 12-1. Assume that the price of a weekend ski pass is $45 and that the price reflects the actual unit cost of providing a weekend of skiing. Suppose the government imposes a tax of $12 on skiing, which raises the price of a weekend ski pass to $57. How much tax revenue is collected from these four skiers?
A)$0.
B)$12.
C)$36.
D)$48.

Question

Table 12-1 
-Refer to Table 12-1. Assume that the price of a weekend ski pass is $45 and that the price reflects the actual unit cost of providing a weekend of skiing. Suppose the government imposes a tax of $12 on skiing, which raises the price of a weekend ski pass to $57. How much tax revenue is collected from these four skiers?
A)$0. 
B)$12. 
C)$36. 
D)$48.

Quizplus · Accepted Answer

To find the tax revenue collected, we need to calculate the change in quantity demanded due to the tax. From the table, we can see that at a price of $45, there are 4 skiers. With a tax of $12, the price increases to $57. From the table, at a price of $57, only 3 skiers are willing to buy a ski pass. Therefore, the tax caused a decrease in quantity demanded of 1 ski pass.

The tax revenue collected is equal to the tax per unit multiplied by the quantity of units sold with the tax. In this case, the tax per unit is $12 and the quantity sold with the tax is 3.

Tax revenue = $12 * 3 = $36

Therefore, the best choice is C.

Table 12-1 -Refer to Table 12-1. Assume That the Price of a Price