Suppose That the Market for Cigarettes Is Initially in Equilibrium $P = 60 - Q ^ { d }$

question 34

Multiple Choice

Suppose that the market for cigarettes is initially in equilibrium and is perfectly competitive. The demand curve can be expressed as $P = 60 - Q ^ { d }$ ; the supply curve can be expressed as $P =$ $0.5 Q ^ { s }$ . Quantity is expressed in millions of boxes per month. Now suppose that the federal government imposes a production quota on cigarettes of 30 million boxes per month. What is the deadweight loss (per million boxes) associated with the quota?

• A) \(\$ 275\)
• B) \(\$ 75\)
• C) \(\$ 50\)
• D) \(\$ 25\)

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Definitions:

Oxidative Phosphorylation

A process occurring in mitochondria that uses oxygen and high-energy electrons to produce ATP and water.

Krebs Cycle

A series of chemical reactions used by all aerobic organisms to generate energy through the oxidation of acetate derived from carbohydrates, fats, and proteins into carbon dioxide and water.

Oxygen

A chemical element with symbol O and atomic number 8, essential for respiration in animals and plants and a component of the Earth's atmosphere.

Oxygen Consumption

The rate at which oxygen is used by tissues, an important measure of metabolic activity and energy expenditure in organisms.