Consider a Market in Which Demand Is Given by P

question 2

Multiple Choice

Consider a market in which demand is given by P = 30 - 2q and supply is given by P = q.If the government imposes a tax of $6 per unit on suppliers:

• A)Consumers pay a price of $16 and suppliers receive a net price (not including the tax) of $10.
• B)Consumers pay a price of $12 and suppliers receive a net price (not including the tax) of $6.
• C)Consumers pay a price of $14 and suppliers receive a net price (not including the tax) of $8.
• D)Consumers pay a price of $20 and suppliers receive a net price (not including the tax) of $14.
• E)None of the above.

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Definitions:

Cash

Physical currency such as coins and banknotes or the equivalent in bank balances that can be immediately accessible.

Book Cash

The amount of cash on hand as recorded in the financial records of a company.

Bank Cash

Bank Cash refers to the liquid assets held by a financial institution that is readily available for transactions and immediate withdrawal.

Cheques

A written, dated, and signed instrument that directs a bank to pay a specific sum of money to the bearer or to a specified person, out of the drawer's bank account.