Consider an Excise Tax Imposed on Daily Parking Charges in the Downtown

question 159

Multiple Choice

Consider an excise tax imposed on daily parking charges in the downtown of a small city.Before the imposition of the tax,equilibrium price and quantity are $15 and 100 cars parked.(P = $15,Q = 100) .The city government imposes a tax of $3 per car parked per day.Market equilibrium adjusts to P = $16 and Q = 95.How much tax revenue does the city government collect per day?

• A)$95
• B)$100
• C)$285
• D)$300
• E)$1710

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Definitions:

Average Total Cost

The total cost of producing a certain quantity of output divided by that quantity, representing the per-unit cost of production.

Economic Losses

Financial losses incurred due to factors such as market fluctuations, business operation inefficiencies, or external events affecting the economy.

Average Variable Cost

The total variable costs (costs that change with the level of output) divided by the quantity of output produced.

Marginal Revenue

The additional income gained from selling one more unit of a good or service.