Suppose a Tax of $5 Per Unit Is Imposed on a Good.The

question 214

Multiple Choice

Suppose a tax of $5 per unit is imposed on a good.The supply curve is a typical upward-sloping straight line,and the demand curve is a typical downward-sloping straight line.The tax decreases consumer surplus by $10,000 and decreases producer surplus by $15,000.The deadweight loss of the tax is $2,500.The tax decreased the equilibrium quantity of the good from

• A)6,500 to 5,500.
• B)5,500 to 4,500.
• C)5,000 to 3,000.
• D)6,000 to 4,000.

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