Use the figure below to answer the following question(s) .
Figure 4-8
-Refer to Figure 4-8. The supply curve S₁ and the demand curve D indicate initial conditions in the market for soft coal. A $40-per-ton tax on soft coal is levied, shifting the supply curve from S₁ to S₂. Which of the following states the actual burden of the tax?

Question

Use the figure below to answer the following question(s) .
Figure 4-8

-Refer to Figure 4-8. The supply curve S₁ and the demand curve D indicate initial conditions in the market for soft coal. A $40-per-ton tax on soft coal is levied, shifting the supply curve from S₁ to S₂. Which of the following states the actual burden of the tax?

Quizplus · Accepted Answer

The tax shifts the supply curve upward by $40, which means that the price of soft coal increases by $40. The new equilibrium price is $80, and the new equilibrium quantity is 10 million tons. The buyers pay $40 more per ton, and the sellers receive $40 less per ton. Therefore, the actual burden of the tax is $10 for buyers and $30 for sellers.

Use the Figure Below to Answer the Following Question(s)