(Advanced Analysis) the Equations for the Demand and Supply Curves

question 32

Multiple Choice

(Advanced analysis) The equations for the demand and supply curves for a particular product are P = 10 − 0.4Q and P = 2 + 0.4Q, where P is price and Q is quantity expressed in units of 100.After an excise tax is imposed on the product, the supply equation is P = 3 + 0.4Q.The efficiency loss of this tax is

• A)$125.00.
• B)$62.50.
• C)$87.50.
• D)$1.00.

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