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FIGURE 18- 3 -Refer to Figure 18- 3. Suppose That Supply Is Perfectly

Question 23

Multiple Choice

FIGURE 18- 3 -Refer to Figure 18- 3. Suppose that supply is perfectly elastic and the price of this good is initially P3. If an excise tax raises the price from P3 to P4, the excess burden of the tax is A) the area BFC. B) the area P2BP3. C) the area P3AP4. D) zero. E) the area P1CP4. FIGURE 18- 3
-Refer to Figure 18- 3. Suppose that supply is perfectly elastic and the price of this good is initially
P3. If an excise tax raises the price from P3 to P4, the excess burden of the tax is


A) the area BFC.
B) the area P2BP3.
C) the area P3AP4.
D) zero.
E) the area P1CP4.

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