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Managerial Economics · End Term · 10 May 2026 · January 2026 term · Set 1

Question 23: Tax revenue for the government will be (in thousand INR)

Question 23

+1.5 marksNumerical answer

India currently imports all of its palm oil. The annual demand for palm oil by Indian consumers is given by the demand curve Q=2000-4P, where Q is quantity of palm oil in thousand litres and P is market price in INR per litre. World producers can harvest and ship palm oil to Indian distributors at a constant marginal cost (=average cost) of INR 50 and Indian distributors can distribute it at a cost of INR 10 per litre. Consider market for palm oil to be competitive.
Indian government is considering a tariff on palm oil import of INR 10 per litre.
Based on the above data, answer the given subquestions.

Tax revenue for the government will be (in thousand INR) ________________

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Correct answer: 17200

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Question 23 of 37 in the IIT Madras BS Managerial Economics (Managerial Economics) End Term paper sat on 10 May 2026, in the January 2026 term (Managerial Economics 06 May 26). It carries 1.5 marks.

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