Suppose that a specific tax of $3 is imposed on producers of bread. Th

Suppose that a specific tax of $3 is imposed on producers of bread. The bread market supply is Qs = 10 + 0.5P and the bread market demand is Qd = 100-P. What is the change in the equilibrium quantity of bread induced by the tax incidence?

A) Equilibrium quantity decreased by three units.
B) Equilibrium quantity increased by two units.
C) Equilibrium quantity decreased by one unit.
D) Equilibrium quantity increased by one unit.

ANSWER

C