The following figure shows the supply and demand curves in a competitive market for a good. The government is considering a $1.50 tax on this good.

-Refer to the above figure.If the $1.50 tax is collected from the producers of this good,the effective price of a unit of this good for the consumers will ________.

Question

The following figure shows the supply and demand curves in a competitive market for a good. The government is considering a $1.50 tax on this good.
 
-Refer to the above figure.If the $1.50 tax is collected from the producers of this good,the effective price of a unit of this good for the consumers will ________.

Quizplus · Accepted Answer

The tax shifts the supply curve upwards by $1.50, increasing the price consumers pay from $3.50 to $5.00.

The Following Figure Shows the Supply and Demand Curves in a Competitive