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Figure: The Market for Yachts
-(Figure: The Market for Yachts) Look at the figure The Market for Yachts. If the government imposes a $60,000 tax on yachts (collected from the producers), consumers will pay _____ of the tax and producers will pay _____.

Question

Use the following to answer questions:
Figure: The Market for Yachts 
-(Figure: The Market for Yachts) Look at the figure The Market for Yachts. If the government imposes a $60,000 tax on yachts (collected from the producers), consumers will pay _____ of the tax and producers will pay _____.

Quizplus · Accepted Answer

The tax burden is shared between consumers and producers based on the elasticity of demand and supply. In this case, consumers pay $40,000 and producers pay $20,000, indicating that the demand is relatively inelastic compared to supply.

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