Economics 9708 · AS & A Level · Maximum and minimum prices

Maximum and minimum prices — practice question

The diagram illustrates the effect of a government introducing a unit tax on a demerit good. S represents the supply curve before the tax, and S1 represents the supply curve after the tax. What is the after-tax revenue of the firm producing the demerit good?

  • A$100
  • B$200
  • C$300
  • D$500

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