Use the following information to answer the following questions.
The following graph depicts a market where a tax has been imposed.P e was the equilibrium price before the tax was imposed,and Q e was the equilibrium quantity.After the tax,P C is the price that consumers pay,and P S is the price that producers receive.Q T units are sold after the tax is imposed.NOTE: The areas B and C are rectangles that are divided by the supply curve S T .Include both sections of those rectangles when choosing your answers.

-What is the amount of the tax,as measured along the y axis?

Question

Use the following information to answer the following questions.
The following graph depicts a market where a tax has been imposed.P e was the equilibrium price before the tax was imposed,and Q e was the equilibrium quantity.After the tax,P C is the price that consumers pay,and P S is the price that producers receive.Q T units are sold after the tax is imposed.NOTE: The areas B and C are rectangles that are divided by the supply curve S T .Include both sections of those rectangles when choosing your answers.
 
-What is the amount of the tax,as measured along the y axis?

Quizplus · Accepted Answer

The amount of the tax is measured along the y axis as the vertical distance between the original equilibrium price (P_e) and the price consumers pay after taxes (P_C), which is F1F1F1. However, since producers only receive P_S, the amount of the tax is actually the distance between P_C and P_S, which is F1F1F1S1. Therefore, the correct choice is C, which is P_C F1F1F1S1F1F1F10 P_S.

Use the Following Information to Answer the Following Questions