The sales of bread have increased from 10 units to 15 units. Suppose the government imposed a unit tax of Rs. 5 on current production, then the total tax that the firm must pay to the government is?
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → Rs. 75
Total Tax=Unit Tax × Number of Units Sold
Given:
-
Unit Tax = ₹5
-
Sales increased from 10 units to 15 units → So, current production = 15 units
Total Tax=5×15 = ₹75