Figure 6-33
The diagram shows the effect of a tax as measured by the distance between J and K.
-Refer to Figure 6-33.Based upon the diagram,

Question

​Figure 6-33
The diagram shows the effect of a tax as measured by the distance between J and K. 
-Refer to Figure 6-33.Based upon the diagram,

Quizplus · Accepted Answer

The distance between J and K represents the amount of tax. As the distance between the original equilibrium point and the new equilibrium point where the price is higher and the quantity demanded is lower, the buyers are paying more than they were before the tax. Therefore, the incidence of the tax falls more heavily on the buyers.

​Figure 6-33 The Diagram Shows the Effect of a Tax as Measured

Figure 6-33 The Diagram Shows the Effect of a Tax as Measured