Question 1
Refer to Scenario 19.4 below to answer the question(s) that follow.
SCENARIO 19.4: Suppose demand for widgets is given by the equation
P = 10 - 0.25
Q. Originally, the price of the good is $5 per unit. When a tax of $1 per unit is imposed, the price of the good rises to $6 per unit.
Refer to Scenario 19.4. Prior to the imposition of the tax consumers purchased ________ widgets and after the tax was imposed they purchased ________ widgets.
Question 2
Refer to Scenario 19.4 below to answer the question(s) that follow.
SCENARIO 19.4: Suppose demand for widgets is given by the equation
P = 10 - 0.25
Q. Originally, the price of the good is $5 per unit. When a tax of $1 per unit is imposed, the price of the good rises to $6 per unit.
Refer to Scenario 19.4. Prior to the imposition of the tax consumer surplus was ________ and after the tax was imposed consumer surplus was ________.
Answer 1
20; 16Answer 2
$50; $32