Exhibit 20-6 -Refer to Exhibit 20-6.Suppose the Three Equilibrium Quantities Are 700,800,and

question 21

Multiple Choice

Exhibit 20-6

-Refer to Exhibit 20-6.Suppose the three equilibrium quantities are 700,800,and 900,and the two other equilibrium prices are $2.20 and $2.75.What is the change in total revenue when a per-unit tax shifts S₁to S₂,given that D₂ is the relevant demand curve?

• A) $260
• B) -$260
• C) $900
• D) $700
• E) -$200

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Definitions:

Production Costs

Expenses directly associated with the manufacturing of goods or the provision of services, such as raw materials and labor.

Unrealised Profit

Profit that has been generated on paper due to accounting entries but has not been realized through cash or other assets.

Retained Earnings

The portion of net earnings not paid out as dividends but retained by the company to be reinvested in its core business or to pay debt.

Cost Of Goods Sold

The total cost involved in manufacturing or acquiring the products that a company has sold during a specific period.