The figure above shows the market for MP3 players, where S is the supply curve and D is the demand curve before any tax is imposed. The government imposes a $10 per unit tax on sellers of MP3 players.
-Based on the figure above,after the tax is imposed,the price received (and kept)by the seller is ________ per MP3 player.

Question

Quizplus · Accepted Answer

The price received by the seller after the tax is imposed is the price buyers pay minus the tax amount. If the tax shifts the supply curve upward by the tax amount, the new equilibrium price from the buyer's perspective is higher, but the seller receives the original price minus the tax. Without the figure, the exact answer can't be determined, but based on the options provided and typical outcomes of such scenarios, if a tax is imposed, it usually results in the seller receiving less for the product than the pre-tax price. Option A, $95, suggests a scenario where a tax has been imposed, reducing the seller's received amount from a higher pre-tax level.

The Figure Above Shows the Market for MP3 Players, Where