Use the following to answer question:
-(Figure: The Market for SUVs)Use Figure: The Market for SUVs.If the government imposes a $60,000 tax on SUVs (collected from the producers),consumers will pay _____ of the tax and producers will pay _____.

Question

Use the following to answer question: 
-(Figure: The Market for SUVs)Use Figure: The Market for SUVs.If the government imposes a $60,000 tax on SUVs (collected from the producers),consumers will pay _____ of the tax and producers will pay _____.

Quizplus · Accepted Answer

The division of tax burden between consumers and producers depends on the elasticity of demand and supply. Without specific details on the elasticity from the figure, a general principle is that the tax burden is shared between consumers and producers, but not necessarily equally. Option B suggests a division of the tax burden, which could be plausible if demand is relatively inelastic compared to supply, leading consumers to bear a larger portion of the tax. However, without the figure or more information, this explanation assumes a typical scenario where tax incidence is shared based on elasticity.

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