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Suppose the Market Demand Function for Ice Cream Is Q^d=10-2P

Question 6

Multiple Choice

Suppose the market demand function for ice cream is Q^d=10-2P and the market supply function for ice cream is Q^s=4P-2, both measured in millions of gallons of ice cream per year. Suppose the government imposes a $0.50 tax on each gallon of ice cream. The aggregate surplus with the tax is

A) $6.20
B) $8.80
C) $2.68
D) $8.96

Suppose the Market Demand Function for Ice Cream Is Qd=10-2P

Multiple Choice

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Suppose the Market Demand Function for Ice Cream Is Q^d=10-2P

Correct Answer:
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