Figure 8-4
The vertical distance between points A and B represents a tax in the market.
-Refer to Figure 8-4.The price that buyers effectively pay after the tax is imposed is
A)$12.
B)between $8 and $12.
C)between $5 and $8.
D)$5.

Question

Figure 8-4
The vertical distance between points A and B represents a tax in the market. 
-Refer to Figure 8-4.The price that buyers effectively pay after the tax is imposed is
A)$12. 
B)between $8 and $12. 
C)between $5 and $8. 
D)$5.

Quizplus · Accepted Answer

The price that buyers effectively pay after the tax is imposed is $12. This is because the tax is a per-unit tax, and the buyers will pay the tax in addition to the price of the good.

Figure 8-4 the Vertical Distance Between Points a and B Represents a Represents