Question

The equilibrium quantity in the market for widgets is 250 per month when there is no tax. Then a tax of $6 per widget is imposed. As a result, the government is able to raise $750 per month in tax revenue. What is the after-tax quantity of widgets? What is the size of the deadweight loss due to the tax?

Answer 1

125 per month

Step-by-step explanation:

The after-tax quantity of widgets is 125 per month.