Multiple Choice
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,the tax ________ the price received (and kept) by the seller by ________ per MP3 player.
A) lowers; $5
B) raises; $5
C) raises; $10
D) lowers; $10
E) lowers; $2.50
Correct Answer:
Verified
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