The Inverse Demand Function for Video Games Is P =

question 18

Multiple Choice

The inverse demand function for video games is p = 240 - 2q and the inverse supply function is p = 3 + q.When the government imposes a $6 tax on each video game purchased,

• A)consumer's surplus falls by more than producer's surplus.
• B)producer's surplus falls by more than consumer's surplus.
• C)consumer's surplus and producer's surplus fall by the same amount.
• D)consumer's surplus falls and producer's surplus increases.
• E)producer's surplus falls and consumer's surplus increases.

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