The Inverse Demand Function for Cases of Whiskey Defined by P

question 5

Multiple Choice

The inverse demand function for cases of whiskey defined by p = 160 - 6q, and the inverse supply function is defined by p = 61 + 3q.Originally there was no tax on whiskey.Then the government began to tax suppliers of whiskey $27 for every case they sold.How much did the price paid by consumers rise when the new equilibrium was reached?

• A)It rose by $27.
• B)It rose by $29.
• C)It rose by $18.
• D)It rose by $16.
• E)None of the above.

---

Definitions:

Conversion Costs

The total expenses of direct labor and manufacturing overhead used to transform raw materials into complete products.

Cost per Unit

The cost incurred for producing, storing, and selling one unit of a product, crucial for pricing and profitability analysis.

First Department

The initial stage or section in a manufacturing or production process, where the raw materials start their transformation.

First-In, First-Out

An inventory valuation method that assumes goods are sold in the order they are acquired, so the oldest inventory items are sold first.