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The market for deep fried croissants is given by: Demand: P = 45 - 2.2Q Supply: P = 1.7Q Suppose that the government imposes a
The market for deep fried croissants is given by: Demand: P = 45 - 2.2Q Supply: P = 1.7Q Suppose that the government imposes a tax of $5 per deep fried croissant to discourage unhealthy eating patterns. In an attempt to hit back and recoup their profits, the deep fried croissant industry launches a wide-scale marketing campaign that successfully generates hype around their product, causing its demand to surge to P = 66 - 2.2Q. By how much has producer surplus increased, relative to before the implementation of the tax? O a. $207.95 O b. $198.75 O c. $129.28 O d. $94.78
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