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The inverse demand function for grapefruit is defined by the equation p = 282 - 9q, where q is the number of units sold.The inverse supply function is defined by p = 7 + 2q.A tax of $22 is imposed on suppliers for each unit of grapefruit that they sell.When the tax is imposed, the quantity of grapefruit sold falls to
A) 25
B) 14
C) 21
D) 23
E) 24.
Inverse Demand Function
A function that expresses the price of a good or service as a function of the quantity demanded, typically used in economics to determine pricing strategies.
Tax Imposed
A financial charge or levy placed by a government on individuals, transactions, or properties to raise revenue.
Grapefruit
A large, yellowish citrus fruit with a somewhat bitter and sour taste.
- Examine the influence of taxation on market balance and its effect on sales volume.
- Compute the equilibrium amounts in response to variations in supply and demand.
- Examine the impact of external measures like taxes and subsidies on the behavior of markets.
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Learning Objectives
- Examine the influence of taxation on market balance and its effect on sales volume.
- Compute the equilibrium amounts in response to variations in supply and demand.
- Examine the impact of external measures like taxes and subsidies on the behavior of markets.
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