Consider a market in which the demand curve is P = 12 - Q and the supply curve is P=2+Q. Suppose that the government imposes a tax of $4 per unit on the sellers in this market. Then the resulting government revenue equals $4 $4.5 $12 $12.5

Consider a market in which the demand curve is P = 12 - Q and the supply curve is P=2+Q. Suppose that the government imposes a tax of $4 per unit on the sellers in this market. Then the resulting government revenue equals $4 $4.5 $12 $12.5

Principles of Economics (MindTap Course List)

8th Edition

ISBN:9781305585126

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter8: Application: The Cost Of Taxation

Section: Chapter Questions

Problem 4CQQ

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Consider a market in which the demand curve is P = 12 - Q and the supply curve is P = 2+Q.
Suppose that the government imposes a tax of $4 per unit on the sellers in this market. Then the
resulting government revenue equals
$4
$4.5
$12
O $12.5

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Step 1: Definition of Demand

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Step 2: Before tax equilibrium quantity and price

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Step 3: Government imposes a tax of $4

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Step 4: calculation of government revenue

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