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
Economics Today and Tomorrow, Student Edition
1st Edition
ISBN:9780078747663
Author:McGraw-Hill
Publisher:McGraw-Hill
Chapter5: Buying The Necessities
Section: Chapter Questions
Problem 20AA
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Question
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
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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