(Advanced Analysis)The Equations for the Demand and Supply Curves for a Particular

question 28

Multiple Choice

(Advanced analysis) The equations for the demand and supply curves for a particular product are P = 10 − 0.4 Q and P = 1 + 0.4 Q, 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 = 2 + 0.4 Q. Government's revenue from this tax is

• A)$1,000.
• B)$1,125.
• C)$875.
• D)$1,400.

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