Figure 18-2 Figure 18-2 shows a demand curve and two sets of supply curves, one set more elastic than the other. -Refer to Figure 18-2. If the government imposes an excise tax of $1.00 on every unit sold, the consumer's burden of the tax A) is P_a- P_cunder either supply curve. B) is P_b- P_cunder either supply curve. C) is P_a- P_c if the supply curve is S₀ and P_b- P_cif the supply curve is S₁. D) is P_a- P_d if the supply curve is S₀ and P_b- P_eif the supply curve is S₁.

Question

Quizplus · Accepted Answer

The consumer's burden of the tax is the difference between the price they pay after the tax and the original price before the tax. If the supply curve is S0, the price increases from Pc to Pa, and if the supply curve is S1, the price increases from Pc to Pb.

Figure 18-2 Figure 18-2 Shows a Demand Curve and Two