Figure 8-5

-Refer to Figure 8-5.When a tax is placed on this good,the quantity sold
A)is 600 and buyers effectively pay $10.
B)is 300 and buyers effectively pay $10.
C)is 600 and buyers effectively pay $16.
D)is 300 and buyers effectively pay $16.

Question

Figure 8-5
 
-Refer to Figure 8-5.When a tax is placed on this good,the quantity sold
A)is 600 and buyers effectively pay $10. 
B)is 300 and buyers effectively pay $10. 
C)is 600 and buyers effectively pay $16. 
D)is 300 and buyers effectively pay $16.

Quizplus · Accepted Answer

From the graph, placing a tax of $6 shifts the supply curve upward by $6, resulting in a new equilibrium point at a quantity sold of 300 and a price of $16. Buyers will effectively pay the new price of $16, which includes the tax.

Figure 8-5 -Refer to Figure 8-5.When a Tax Is Placed on This