Question

Question 11 Tries remaining: 2 Points out of 7.70 Stax Flag question $60 $40_ $20 2 4 6 8 10 Calculate the Tax Revenue that this per unit tax would generate. (Do not include a $ sign in your response. Round to the nearest two decimal places if necessary.) Answer Check

Answer 1

Equilibrium Price before tax = $30

Equilibrium quantity before tax = 4 units

Equilibrium price after tax =$60

Tax is the amount equal to the difference between the supply curve after tax and supply curve before tax.

Therefore, Tax= $(60-20)= $40

Equilibrium quantity after tax =2 units

Tax revenue = (Tax)(Equilibrium quantity after tax)

= (40)(2)= $ 80