Exhibit 5-31 -Refer to Exhibit 5-31. The tax burden borne by consumers is: A) P₃DCP₁ B) P₂BDP₃ C) Q₂CAQ₁ D) b and c E) P₂BCP₁

Question

Quizplus · Accepted Answer

The tax burden borne by consumers is the increase in price they have to pay due to the tax. In this Exhibit, the price paid by consumers increases from PS1 to PS2, indicating that they bear the entire burden of the tax. Therefore, the tax burden borne by consumers is P₂BCP₁.

Exhibit 5-31 -Refer to Exhibit 5-31. the Tax Burden Borne by Consumers