The figure shows the market for gourmet ice cream. In effort to reduce obesity, government places a $2 tax per gallon on suppliers in this market, shifting the supply curve from S, to S,. The total tax Price (dollars per gallon of ice cream) 20 revenue is equal to 18 A. $500,000. 16 B. $200,000. 14 C. $800,000. 12 D. $400,000. O E. More information is needed to determine the total tax 10 +. D revenue. 50 100 150 200 250 300 350 Quantity (thousands of gallons of ice cream)

Essentials of Economics (MindTap Course List)
8th Edition
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter8: Application: The Cost Of Taxation
Section: Chapter Questions
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Price (dollars per gallon of ice cream)
The figure shows the market for gourmet ice cream. In effort to
reduce obesity, government places a $2 tax per gallon on suppliers
in this market, shifting the supply curve from S, to S,. The total tax
20
revenue is equal to
18
A. $500,000.
16
B. $200,000.
14
C. $800,000.
12
D. $400,000.
E. More information is needed to determine the total tax
10
revenue.
50
100 150 200 250
300
350
Quantity (thousands of gallons of ice cream)
Transcribed Image Text:Price (dollars per gallon of ice cream) The figure shows the market for gourmet ice cream. In effort to reduce obesity, government places a $2 tax per gallon on suppliers in this market, shifting the supply curve from S, to S,. The total tax 20 revenue is equal to 18 A. $500,000. 16 B. $200,000. 14 C. $800,000. 12 D. $400,000. E. More information is needed to determine the total tax 10 revenue. 50 100 150 200 250 300 350 Quantity (thousands of gallons of ice cream)
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