Figure 8-1
-Refer to Figure 8-1.Suppose a $3 per-unit tax is placed on this good.The per-unit burden of the tax on buyers is

Question

Figure 8-1 
-Refer to Figure 8-1.Suppose a $3 per-unit tax is placed on this good.The per-unit burden of the tax on buyers is

Quizplus · Accepted Answer

When a per-unit tax of $3 is placed on the good, the new equilibrium price will be $9 and the new equilibrium quantity will be 3 units. The price that buyers pay will increase from $8 to $9, which is a $1 increase. The price that sellers receive will decrease from $8 to $6, which is a $2 decrease. Therefore, the per-unit burden of the tax on buyers is $1 and the per-unit burden of the tax on sellers is $2. The best choice is B, as it correctly identifies the per-unit burden on buyers.

Figure 8-1 -Refer to Figure 8-1.Suppose a $3 Per-Unit Tax Is Placed