Consider an Excise Tax Imposed on Daily Parking Charges in the Downtown

question 159

Multiple Choice

Consider an excise tax imposed on daily parking charges in the downtown of a small city.Before the imposition of the tax,equilibrium price and quantity are $15 and 100 cars parked.(P = $15,Q = 100) .The city government imposes a tax of $3 per car parked per day.Market equilibrium adjusts to P = $16 and Q = 95.How much tax revenue does the city government collect per day?

• A)$95
• B)$100
• C)$285
• D)$300
• E)$1710