Figure 4-24

-Refer to Figure 4-24.The per unit burden of the tax on buyers is
A)P₃ - P₁.
B)P₃ - P₂.
C)P₂ - P₁.
D)Q₂ - Q₁.

Question

Figure 4-24
 
-Refer to Figure 4-24.The per unit burden of the tax on buyers is
A)P₃ - P₁. 
B)P₃ - P₂. 
C)P₂ - P₁. 
D)Q₂ - Q₁.

Quizplus · Accepted Answer

The per unit burden of the tax on buyers is the difference between the price buyers pay before and after the tax is imposed. In this case, the price paid by buyers increases by P₃ - P₂ after the tax is imposed. Therefore, the per unit burden of the tax on buyers is P₃ - P₂.

Figure 4-24 -Refer to Figure 4-24.The Per Unit Burden of the Tax