This Problem Will Be Easier If You Have Done Problem

question 14

Multiple Choice

This problem will be easier if you have done Problem 3. The inverse demand function for grapefruit is defined by the equation p = 317 - 6q, where q is the number of units sold. The inverse supply function is defined by p = 5 + 6q. A tax of $48 is imposed on suppliers for each unit of grapefruit that they sell. When the tax is imposed, the quantity of grapefruit sold falls to

• A) 20.
• B) 18.
• C) 22.
• D) 26.
• E) 24.

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Definitions:

Tax

A compulsory financial charge or other levy imposed on an individual or a legal entity by a governmental organization.

Market

A venue for the exchange of goods, services, or information between buyers and sellers, which may be physical or virtual.

Equilibrium Price

The price at which the quantity of a good demanded by consumers equals the quantity supplied by producers.

Market

A place or system where buyers and sellers interact to exchange goods, services, or information.