Figure 6-14
-Refer to Figure 6-14.Suppose a tax of $2 per unit is imposed on this market.How much will sellers receive per unit after the tax is imposed?

Question

Figure 6-14 
-Refer to Figure 6-14.Suppose a tax of $2 per unit is imposed on this market.How much will sellers receive per unit after the tax is imposed?

Quizplus · Accepted Answer

After the tax is imposed, the supply curve shifts upward by the amount of the tax ($2), resulting in a new intersection of the supply and demand curves at a quantity of 3 units and a price of $5. The sellers will receive this price of $5 per unit, but since they have to pay the $2 tax per unit, they will only receive $3 per unit after the tax is imposed. Therefore, the correct answer is between $3 and $5.

Figure 6-14 -Refer to Figure 6-14.Suppose a Tax of $2 Per Unit