Figure 6-17

-Refer to Figure 6-17. If the government places a $2 tax in the market, the seller bears $1 of the tax burden.

Question

Figure 6-17
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-Refer to Figure 6-17. If the government places a $2 tax in the market, the seller bears $1 of the tax burden.

Quizplus · Accepted Answer

When a $2 tax is imposed, the burden of the tax is typically split between the buyer and the seller depending on the elasticities of supply and demand. If the seller bears $1 of the tax, it implies that the tax burden is being shared between the seller and the buyer, which is a common outcome in markets.

Figure 6-17 ​

Figure 6-17