The figure above shows the market for MP3 players, where S is the supply curve and D is the demand curve before any tax. The government imposes a $10 per unit tax on buyers of MP3 players.
-The tax ________ the price paid by the buyer by ________ per MP3 player.
A) raises; $5
B) lowers; $5
C) raises; $10
D) lowers; $10
E) raises; $7.50

Question

The figure above shows the market for MP3 players, where S is the supply curve and D is the demand curve before any tax. The government imposes a $10 per unit tax on buyers of MP3 players.
-The tax ________ the price paid by the buyer by ________ per MP3 player.
A) raises; $5 
B) lowers; $5 
C) raises; $10 
D) lowers; $10 
E) raises; $7.50

Quizplus · Accepted Answer

A tax typically raises the price paid by the buyer, and in this context, it raises the price by $5 per MP3 player.

The Figure Above Shows the Market for MP3 Players, Where