The figure above shows the market for the chemical hydrogen ...

[maychende]

The figure above shows the market for the chemical hydrogen sulfide, the production of which creates an external cost. The government imposes the pollution tax shown in the figure. How much tax revenue does the government collect?
 
  A) 640 million
  B) 320 million
  C) 240 million
  D) more than 640 million
  E) zero, because the government has taxed the firms out of business.

Question 2

A price floor is the ________.
 
  A) maximum willingness to pay for a good
  B) minimum price that a seller accepts for a good
  C) lower limit on the price of a good
  D) upper limit on the price of a good

[bpool94]

Answer to Question 1

C

Answer to Question 2

C