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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Definitions:

Opponent's Options

Potential actions or strategies available to a competitor or adversary.

Sequential Game

A type of game in game theory where players make decisions one after another, allowing for a sequence of actions to unfold.

First Mover Advantage

A competitive advantage gained by the first significant company to move into a new market or develop a new product or service.

High Price

A situation where the cost of a product or service is considered to be significantly above average or expected values.