Figure 6-11

-Refer to Figure 6-11. Suppose a tax of $2 per unit is imposed on this market. How much will buyers pay per unit after the tax is imposed?

Question

Figure 6-11
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-Refer to Figure 6-11. Suppose a tax of $2 per unit is imposed on this market. How much will buyers pay per unit after the tax is imposed?

Quizplus · Accepted Answer

The price paid by buyers after a tax is imposed is determined by the new equilibrium price plus the portion of the tax that buyers bear. Without seeing Figure 6-11, the general principle is that the tax shifts the supply curve upwards by the amount of the tax ($2 in this case), leading to a new equilibrium where buyers pay more than the original price but less than the original price plus the full tax. Since choices A and B are below the original price plus tax, and D suggests buyers pay the full tax on top of the original price, C is the most plausible choice, indicating buyers pay more than the original price but not the full amount of the tax on top of it.

Figure 6-11 ​

Figure 6-11