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Suppose the Market Demand for Cigarettes Is: D=10- P, and the Supply

Question 88

Multiple Choice

Suppose the market demand for cigarettes is: D=10- P, and the supply of cigarettes is: S=- 2+P, where P is the price per pack of cigarettes. If the government imposes a cigarette tax of $1 per pack, the deadweight loss is:


A) $0.
B) $0.25.
C) $1.
D) $0.5.

Correct Answer:

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