Suppose That a Market Is Initially in Equilibrium $P = 90 - Q ^ { d }$

question 5

Multiple Choice

Suppose that a market is initially in equilibrium. The initial demand curve is $P = 90 - Q ^ { d }$ . The initial supply curve is $P = 2 Q ^ { s }$ . Suppose that the government imposes a $\$ 3$ tax on this market. What is the dead-weight loss due to the tax?

• A) \(\$ 3\).
• B) \(\$ 2\).
• C) \(\$ 1.50\).
• D) \(\$ 1.00\).

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Definitions:

Multiechelon Supply Chain

A complex supply chain structure involving multiple levels of suppliers, manufacturers, and distribution centers.

Integer Rule

A mathematical principle that states solutions to certain problems must be whole numbers, commonly applied in optimization and scheduling.

Distributor

An intermediary entity in the supply chain that buys products from manufacturers or wholesalers and sells them to retailers or direct to consumers.

Lot Sizing Decisions

The process of determining the optimal order quantity that minimizes total inventory costs, including ordering, holding, and stockout costs.