Sales Tax

The following questions refer to the accompanying diagram shows the effects of a sales tax imposed on consumers. The initial price and quantity are P0 and Q0, respectively. After the tax is imposed, the equilibrium quantity is Q1, firms receive the price Ps, and consumers pay the price Pd.

-Refer to Sales Tax.The portion of the tax revenue ultimately paid by consumers is

Question

Sales Tax

The following questions refer to the accompanying diagram shows the effects of a sales tax imposed on consumers. The initial price and quantity are P0 and Q0, respectively. After the tax is imposed, the equilibrium quantity is Q1, firms receive the price Ps, and consumers pay the price Pd.

-Refer to Sales Tax.The portion of the tax revenue ultimately paid by consumers is

Quizplus · Accepted Answer

The portion of the tax revenue ultimately paid by consumers is represented by the areas under the demand curve that correspond to the tax increase. This is typically shown as the areas above the pre-tax price level and below the post-tax price level, which are areas C and D. These areas represent the increase in price that consumers pay due to the tax, hence why they bear this portion of the tax burden.

Sales Tax the Following Questions Refer to the Accompanying Diagram Shows the Diagram