(Figure: The Market for Music Downloads) Use Figure: The Market for Music Downloads.If the government imposes a tax of $3 in this market,the government will receive tax revenue of:

A) $20.
B) $30.
C) $60.
D) $75.

Question

Hannah Kaplan · Accepted Answer

Final Answer : B, Explanation :  A tax of $3 shifts the supply curve up by $3, reducing the quantity supplied from 120 to 90. At a price of $10, the quantity demanded is 100, so only 90 units will be sold after the tax. The price rises to $13 ($10 + $3) and consumers pay this entire amount. Tax revenue is equal to the tax per unit ($3) multiplied by the quantity sold (90), equal to $270.

(Figure: The Market for Music Downloads) Use Figure: The Market for Music Downloads.If the government imposes a tax of $3 in this market,the government will receive tax revenue of:

A) $20.
B) $30.
C) $60.
D) $75.

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Learning Objectives

Learning Objectives

Related questions

(Figure: The Market for Music Downloads) Use Figure: The Market for Music Downloads.If the government imposes a tax of $3 in this market,the government will receive tax revenue of:A) $20.B) $30.C) $60.D) $75.

Definitions

Learning Objectives

Learning Objectives

Related questions

(Figure: The Market for Music Downloads) Use Figure: The Market for Music Downloads.If the government imposes a tax of $3 in this market,the government will receive tax revenue of:

A) $20.
B) $30.
C) $60.
D) $75.