In the diagram above,D represents the original demand curve,S represents the original supply curve,and S' represents the supply curve once a per-unit tax is imposed.
-Refer to the diagram above.If the distance ______ exceeds the distance ______,then consumers bear______ of the burden of the tax.
A) 0E;0G;less
B) AG;EA;more
C) EA;AG;more
D) HJ;HI;more
E) EG;0A;less

Question

In the diagram above,D represents the original demand curve,S represents the original supply curve,and S' represents the supply curve once a per-unit tax is imposed.
-Refer to the diagram above.If the distance ______ exceeds the distance ______,then consumers bear______ of the burden of the tax.
A) 0E;0G;less 
B) AG;EA;more 
C) EA;AG;more 
D) HJ;HI;more 
E) EG;0A;less

Quizplus · Accepted Answer

The distance EA represents the amount of tax, which is smaller than the distance AG. This indicates that suppliers bear a smaller portion of the tax burden compared to consumers. Therefore, choice C is correct. Choices A and E are incorrect because they suggest that consumers bear a smaller portion of the tax burden, which goes against the information given in the diagram. Choice B is incorrect because it suggests that suppliers bear a larger portion of the tax burden, which is also not supported by the diagram. Choice D is incorrect because the distances HJ and HI are not relevant to the tax burden.

In the Diagram Above,D Represents the Original Demand Curve,S Represents