Figure 6-27
This figure shows the market demand and market supply curves for good Z.
-Refer to Figure 6-27.Suppose a tax of $3 per unit is imposed on this market.How much will sellers receive per unit after the tax is imposed?

Question

Figure 6-27
This figure shows the market demand and market supply curves for good Z. 
-Refer to Figure 6-27.Suppose a tax of $3 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 price received by sellers will decrease by the amount of the tax, which is $3. The new equilibrium price will be higher than the original price, but lower than the price buyers were paying before the tax was imposed. Using the graph, we can see that the new equilibrium price falls between $16 and $20, so the best answer choice is B.

Figure 6-27 This Figure Shows the Market Demand and Market Supply Curves