Figure 8-5
Suppose that the government imposes a tax of P3 - P1.
-Refer to Figure 8-5.The price that sellers effectively receive after the tax is imposed is
A)P1.
B)P2.
C)P3.
D)P4.

Question

Figure 8-5
Suppose that the government imposes a tax of P3 - P1. 
-Refer to Figure 8-5.The price that sellers effectively receive after the tax is imposed is
A)P1. 
B)P2. 
C)P3. 
D)P4.

Quizplus · Accepted Answer

The price that sellers effectively receive after the tax is imposed is P1. This is because the tax is a per-unit tax, and so the sellers will receive P1 for each unit they sell.

Figure 8-5 Suppose That the Government Imposes a Tax of P3 -