Refer to the graph shown. Assume the market is initially in equilibrium at point b in the graph but the imposition of a per-unit tax on this product shifts the supply curve up from S₀ to S₁. The effect of the tax is to raise equilibrium price from: A) P₁ to P₁ + t. B) P₁ to P₂. C) P₂ − t to P₂. D) P₂ − t to P₁ + t.

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Quizplus · Accepted Answer

The Answer of Refer to the graph shown. Assume the market is initially in equilibrium at point b in the graph but the imposition of a per-unit tax on this product shifts the supply curve up from S₀ to S₁. The effect of the tax is to raise equilibrium price from: A) P₁ to P₁ + t. B) P₁ to P₂. C) P₂ − t to P₂. D) P₂ − t to P₁ + t.

Refer to the Graph Shown