In the Market for Widgets,the Supply Curve Is the Typical

question 115

Multiple Choice

In the market for widgets,the supply curve is the typical upward-sloping straight line,and the demand curve is the typical downward-sloping straight line.The equilibrium quantity in the market for widgets is 200 per month when there is no tax.Then a tax of $5 per widget is imposed.As a result,the government is able to raise $800 per month in tax revenue.We can conclude that the equilibrium quantity of widgets has fallen by

• A)40 per month.
• B)50 per month.
• C)75 per month.
• D)100 per month.

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