Exhibit 20-6 -Refer to Exhibit 20-6.Let S₁be the supply curve of a firm.If S₂represents the supply curve of the same firm after the government imposes a per-unit tax,the tax is A) $1 per unit. B) $2 per unit. C) $3 per unit. D) -$1 per unit, i.e., a subsidy of $1.

Question

Quizplus · Accepted Answer

The tax is the vertical distance between the two supply curves. In this case, the vertical distance is $1 per unit.

Exhibit 20-6 -Refer to Exhibit 20-6.Let S1 be the Supply Curve of the Supply

Exhibit 20-6 -Refer to Exhibit 20-6.Let S₁be the Supply Curve of the Supply