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If instead of taxing Hot Air’s profit, the government imposes a sales tax on balloon rides of $30 a ride, what are the new profit-maximizing quantity, price, and economic profit?   A) P=200, Q=1, and Profit=10   B) P=160, Q=3, and Profit=10   C) P=180, Q=2, and Profit=40

If instead of taxing Hot Air’s profit, the government imposes a sales tax on balloon rides of $30 a ride, what are the new profit-maximizing quantity, price, and economic profit?   A) P=200, Q=1, and Profit=10   B) P=160, Q=3, and Profit=10   C) P=180, Q=2, and Profit=40

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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If instead of taxing Hot Air’s profit, the government imposes a sales tax on balloon rides of $30 a ride, what are the new profit-maximizing quantity, price, and economic profit?

 

A) P=200, Q=1, and Profit=10

 

B) P=160, Q=3, and Profit=10

 

C) P=180, Q=2, and Profit=40

Price 220 200 180 160 140 120 Quantity 1 2 3 4 5 TR 200 360 480 560 600 MR 200 160 120 80 40 Total cost 80 160 260 380 520 680 MC 80 100 120 140 160
Transcribed Image Text:Price 220 200 180 160 140 120 Quantity 1 2 3 4 5 TR 200 360 480 560 600 MR 200 160 120 80 40 Total cost 80 160 260 380 520 680 MC 80 100 120 140 160
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