Exhibit 19-6 -Refer to Exhibit 19-6. Let S₁ be the supply curve of a firm. If S₂ represents the supply curve of the same firm after the government imposes a per-unit tax, the tax is A)$1 per unit. B)$2 per unit. C)$3 per unit. D)-$1 per unit, i.e., a subsidy of $1.

Question

Quizplus · Accepted Answer

The shift from S₁ to S₂ indicates a movement that can be attributed to the imposition of a per-unit tax. The numerical change from 11 to 12 in the supply curve notation suggests a $1 increase per unit, which is consistent with the imposition of a $1 per unit tax.

Exhibit 19-6 ​

Exhibit 19-6