A specific tax will be imposed on a good. The supply and demand curves for the good are shown in the diagram below. Given this information, the burden of the tax:
A) is shared about evenly between consumers and producers.
B) falls mostly on consumers.
C) falls mostly on producers.
D) cannot be determined without more information on the price elasticities of supply and demand.

Question

A specific tax will be imposed on a good. The supply and demand curves for the good are shown in the diagram below. Given this information, the burden of the tax: 
A) is shared about evenly between consumers and producers. 
B) falls mostly on consumers. 
C) falls mostly on producers. 
D) cannot be determined without more information on the price elasticities of supply and demand.

Quizplus · Accepted Answer

The Answer of A specific tax will be imposed on a good. The supply and demand curves for the good are shown in the diagram below. Given this information, the burden of the tax: 
A) is shared about evenly between consumers and producers. 
B) falls mostly on consumers. 
C) falls mostly on producers. 
D) cannot be determined without more information on the price elasticities of supply and demand.

A Specific Tax Will Be Imposed on a Good