Exhibit 19-2

-Refer to Exhibit 19-2. The market for good X is initially in equilibrium at $5. The government then places a per-unit tax on good X, as shown by the shift of S₁ to S₂. Approximately what percentage of the tax do producers end up paying?

Question

Exhibit 19-2

Exhibit 19-2 -Refer to Exhibit 19-2. The market for good X is initially in equilibrium at $5. The government then places a per-unit tax on good X, as shown by the shift of S<sub>1</sub> to S<sub>2</sub>. Approximately what percentage of the tax do producers end up paying? A) 55 percent B) 45 percent C) 70 percent D) 63 percent E) 25 percent

Exhibit 19-2 -Refer to Exhibit 19-2. The market for good X is initially in equilibrium at $5. The government then places a per-unit tax on good X, as shown by the shift of S<sub>1</sub> to S<sub>2</sub>. Approximately what percentage of the tax do producers end up paying? A) 55 percent B) 45 percent C) 70 percent D) 63 percent E) 25 percent

-Refer to Exhibit 19-2. The market for good X is initially in equilibrium at $5. The government then places a per-unit tax on good X, as shown by the shift of S₁ to S₂. Approximately what percentage of the tax do producers end up paying?

Quizplus · Accepted Answer

The percentage of the tax that producers pay is determined by the relative elasticities of supply and demand. The shift from S1 to S2 indicates the tax burden distribution, and in this scenario, producers pay approximately 45 percent of the tax.

Exhibit 19-2 ​

Exhibit 19-2