In the Market for Widgets,the Supply Curve Is the Typical

question 374

Multiple Choice

In the market for widgets,the supply curve is the typical upward-sloping straight line,and the demand curve is the typical downward-sloping straight line.The equilibrium quantity in the market for widgets is 200 per month when there is no tax.Then a tax of $5 per widget is imposed.As a result,the government is able to raise $750 per month in tax revenue.We can conclude that the equilibrium quantity of widgets has fallen by

• A) 25 per month.
• B) 50 per month.
• C) 75 per month.
• D) 100 per month.

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Definitions:

Detrimental Reliance

A legal term describing a situation where an individual suffers harm by relying on a promise or representation made by another.

Rescind

To revoke, cancel, or repeal a contract, agreement, or order.

Estimate of Value

An approximation of something's worth, determined through analysis or professional appraisal techniques.

Nondisclosure

The act of withholding information or not communicating certain information, often to protect confidentiality or trade secrets.