FIGURE 18-3
-Refer to Figure 18-3.Suppose that supply is perfectly elastic and the price of this good is initially P₃.If an excise tax raises the price from P₃ to P₄,the direct burden of the tax is

Question

FIGURE 18-3 -Refer to Figure 18-3.Suppose that supply is perfectly elastic and the price of this good is initially P<sub>3</sub>.If an excise tax raises the price from P<sub>3</sub> to P<sub>4</sub>,the direct burden of the tax is A) the area P<sub>3</sub>AP<sub>4</sub>. B) the area P<sub>2</sub>BP<sub>3</sub>. C) the area P<sub>1</sub>CP4. D) the area BFC. E) zero.

Quizplus · Accepted Answer

The Answer of FIGURE 18-3 -Refer to Figure 18-3.Suppose that supply is perfectly elastic and the price of this good is initially P₃.If an excise tax raises the price from P₃ to P₄,the direct burden of the tax is

FIGURE 18-3 -Refer to Figure 18-3.Suppose That Supply Is Perfectly Elastic and Elastic