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Suppose the Equilibrium Price of Organic Almond Butter Is $10

Question 81

Multiple Choice

Suppose the equilibrium price of organic almond butter is $10 a jar. At that price, quantity of almond butter demanded and supplied is 100,000. If a $6 tax per jar paid by suppliers increases the equilibrium price to $14 per jar and reduces the equilibrium quantity sold to 90,000:


A) suppliers pay a greater portion of the tax because they are more price elastic.
B) consumers pay a greater portion of the tax because they are less price elastic.
C) suppliers pay a greater portion of the tax because the tax is levied on them.
D) suppliers pay a greater portion of the tax because they are less price elastic.

Correct Answer:

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