The Inverse Demand Function for Eggs Is P = 125

question 32

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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Definitions:

1099 Form

An IRS tax form used to report various types of income other than wages, salaries, and tips.

Untaxed Income

Income that is not subject to taxation by the authorities.

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A simpler version of the IRS tax form for individuals with straightforward financial situations, no longer in use as of the 2018 tax year.

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Filing status for unmarried taxpayers that is indicated on tax forms which determine the tax rate paid.