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

question 71

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 change in consumer surplus (per million boxes) associated with the quota?

• A) \(\$ 450\)
• B) \(\$ 350\)
• C) \(\$ 300\)
• D) \(\$ 50\)

---

Definitions:

DHCP Server

A server configured to assign IP addresses automatically to devices on a network.

IP Addresses

Unique numeric identifiers assigned to each device connected to a computer network that uses the Internet Protocol for communication, enabling devices to locate and communicate with each other.

Hotspot

A place where individuals can connect to the internet, usually through Wi-Fi, by means of a wireless local area network (WLAN) that is linked to an internet service provider via a router.

SOHO

Small Office/Home Office, referring to businesses or professional work conducted from small offices or homes.