(Advanced Analysis)The Equations for the Demand and Supply Curves for a Particular

Multiple Choice

(Advanced analysis) The equations for the demand and supply curves for a particular product are P = 10 − 0.4 Q and P = 2 + 0.4 Q, where P is price and Q is quantity expressed in units of 100. After an excise tax is imposed on the product, the supply equation is P = 4 + 0.4 Q. The equilibrium quantity before the excise tax is imposed is

A) 1,000 units.
B) 750 units.
C) 875 units.
D) 1,200 units.