Suppose There Is Only One Movie Theatre in a Town

question 100

Multiple Choice

Suppose there is only one movie theatre in a town and the equilibrium price and quantity for movie admissions is $7 and 940 visits per week.Now suppose the government imposes a tax of $3 per movie admission,and the new equilibrium price and quantity are $8.75 and 750 visits per week.What is the weekly excess burden of this tax?

• A)$285
• B)$1312.50
• C)$570
• D)$2250
• E)There is not enough information to know.

Appreciate the importance of maintaining cost-effective exchange relationships for mutual benefits.

Grasp key concepts and methods of marketing strategy, including market segmentation and relationship marketing.

Familiarize with the impact of marketing eras on business strategies and practices.

Understand the concepts and calculations related to the cost of equity and the impact of leverage.

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Definitions:

Alphabetical Order

A method of sorting by arranging items according to the sequence of letters in the alphabet.

Credits

In accounting, credits are entries that decrease assets or increase liabilities and equity on a company's balance sheet, corresponding to the double-entry bookkeeping system.

Debits

Entries made on the left-hand side of an account record in double-entry bookkeeping, indicating increases in assets or expense accounts, or decreases in liabilities, equity, or revenue accounts.

Account Balance

The amount of money present in a financial account at any given moment, which can be positive (credits) or negative (debits).