Suppose That the Market for Cigarettes Is Initially in Equilibrium

question 26

Multiple Choice

Suppose that the market for cigarettes is initially in equilibrium and is perfectly competitive.The demand curve can be expressed as ; the supply curve can be expressed as Quantity is expressed in millions of boxes per month.Now suppose that the federal government imposes a production quota on cigarettes of 30 million boxes per month.What is the change in consumer surplus (per million boxes) associated with the quota?

• A) $450.
• B) $350.
• C) $300.
• D) $50.

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Definitions:

Placenta Expelled

The process occurring after childbirth where the placenta, which provides oxygen and nutrients to the fetus, is expelled from the uterus.

Inguinal Canal

Passage through the lower abdominal wall that transmits the spermatic cord in the male and the round ligament in the female.

Wolffian Ducts

Embryonic structures in males that develop into the epididymis, vas deferens, and seminal vesicles.

Urogenital Folds

Urogenital Folds are embryonic structures that form part of the genitalia, developing into the outer parts of the vagina in females and encasing the urethra in males.