Suppose a tax of $3 per unit is imposed on a good

Economics Dec 23, 2020

Suppose a tax of $3 per unit is imposed on a good. The supply curve is a typical upward-sloping straight line, and the demand curve is a typical downward-sloping straight line. The tax decreases consumer surplus by $3,900 and decreases producer surplus by $3,000. The tax generates tax revenue of $6,000. The tax decreased the equilibrium quantity of the good from:

a. 2,000 to 1,500

b. 2,400 to 2,000

c. 2,600 to 2,000

d. 3,000 to 2,400

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