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Suppose Ren and Regina receive great satisfaction from their consumption of cheesecake. Regina would be willing to purchase only one slice and would pay up
Suppose Ren and Regina receive great satisfaction from their consumption of cheesecake. Regina would be willing to purchase only one slice and would pay up to $8 for it. Ren would be willing to pay $11 for his first slice, $9 for his second slice, and $5 for his third slice. The current market price is $5 per slice. Refer to Scenario 12-2 . Assume that the government places a $4 tax on each slice of cheesecake and that the new equilibrium price is $9. How much tax revenue will be generated from sales to Regina and Ren? a. zero b. $8 c. $12 d. $4
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