Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

this is my question. 35. The corner gas station sells cigarettes, facing a linear downward sloping demand curve. To maximize revenue, the manager set the

this is my question.

image text in transcribed
35. The corner gas station sells cigarettes, facing a linear downward sloping demand curve. To maximize revenue, the manager set the price equal to 14 dollars and sold a quantity of 40 packs per day on average. But to discourage smoking, the government just set a per-pack tax of 2 dollars, to be paid by the buyer. Now, to maximize revenue, the manager will reduce quantity by [ Answer35 ] packs per day on average. (Assume cigarettes are perfectly divisible.)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The Rise And Fall Of Neoliberal Capitalism

Authors: David M Kotz

1st Edition

0674725654, 9780674725652

More Books

Students also viewed these Economics questions

Question

Explain why it is often difficult to delegate

Answered: 1 week ago