The Inverse Demand Function for Eggs Is P = 125

question 2

Multiple Choice

The inverse demand function for eggs is p = 125 - 6q, where q is the number of cases of eggs. The inverse supply is p = 5 + 6q. In the past, eggs were not taxed, but now a tax of 72 dollars per case has been introduced. What is the effect of the tax on the quantity of eggs supplied?

• A) Quantity drops by 7 cases.
• B) Quantity drops by 5 cases.
• C) Quantity drops by 6 cases.
• D) Quantity drops by 12 cases.
• E) None of the above.

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