When looking at a demand and supply graph, if a tax is implemented on a seller, the vertical distance between the old and new supply curves at the new equilibrium quantity will be equivalent to the
A)economic burden of the tax on the seller.
B)economic burden of the tax on the buyer.
C)amount of the tax.
D)price of the item.

Question

Quizplus · Accepted Answer

The vertical distance between the old and new supply curves at the new equilibrium quantity represents the amount of the tax. This is because the tax shifts the supply curve upwards by the amount of the tax, showing how much more the sellers need to receive to supply the same quantity.

When Looking at a Demand and Supply Graph, If a Tax