In the market for garden hoses, the supply curve is the typical upward-sloping straight line, and the demand curve is the typical downward-sloping straight line. The equilibrium quantity in the market for garden hoses is 200 per month when there is no tax. Then a tax of $5 per garden hose is imposed. As a result, the government is able to raise $800 per month in tax revenue.
We can conclude that the equilibrium quantity of garden hoses has fallen by:
a) 40 per month.
b) 50 per month.
c) 75 per month.
d) 100 per month.
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In the market for garden hoses, the supply curve is the typical upward-sloping straight line, and th...
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