Figure 6-15
-Refer to Figure 6-15.Suppose a tax of $5 per unit is imposed on this market.How much will buyers pay per unit after the tax is imposed?

Question

Figure 6-15 
-Refer to Figure 6-15.Suppose a tax of $5 per unit is imposed on this market.How much will buyers pay per unit after the tax is imposed?

Quizplus · Accepted Answer

After the tax is imposed, the new equilibrium price becomes $14 per unit (from $9 without the tax). Buyers will have to pay this higher price, plus the additional $5 tax, so the total price that buyers will pay per unit after the tax is imposed is between $10 and $14 (inclusive). Therefore, the correct answer is (C) between $10 and $14.

Figure 6-15 -Refer to Figure 6-15.Suppose a Tax of $5 Per Unit