Question

Suppose that the Demand and Supply functions are : QD=800-4P and QS=8P-160. The government imposes a...

Suppose that the Demand and Supply functions are : QD=800-4P and QS=8P-160. The government imposes a per unit tax of $3. After the tax, the supply equation becomes: QS=8P-184. (Hint: you really should draw a graph for this question, as you did in the Extra Credit)

Find Government Revenues and Deadweight Loss (DWL) AFTER the tax


Select one:
a. Government Revenues = 1,416; DWL = 12
b. Government Revenues = 1,416; DWL = 8
c. Government Revenues = 1,440; DWL = 12
d. Government Revenues = 1,440; DWL = 6

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