Figure 8-4
The vertical distance between points A and B represents a tax in the market.
-Refer to Figure 8-4.The per-unit burden of the tax on buyers is
A)$3.
B)$4.
C)$5.
D)$8.

Question

Figure 8-4
The vertical distance between points A and B represents a tax in the market. 
-Refer to Figure 8-4.The per-unit burden of the tax on buyers is
A)$3. 
B)$4. 
C)$5. 
D)$8.

Quizplus · Accepted Answer

The per-unit burden of the tax on buyers is the difference between the price buyers are willing to pay (the demand curve) and the price they actually have to pay with the tax included (the new equilibrium price with the tax). The vertical distance between points A and B represents the tax, which is $4. Therefore, the per-unit burden of the tax on buyers is $4.

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