Figure 8-9
The vertical distance between points A and C represents a tax in the market.
-Refer to Figure 8-9.The imposition of the tax causes the price received by sellers to
A)increase from $600 to $800.
B)decrease from $800 to $300.
C)decrease from $600 to $300.
D)remain unchanged at $600.

Question

Figure 8-9
The vertical distance between points A and C represents a tax in the market. 
-Refer to Figure 8-9.The imposition of the tax causes the price received by sellers to
A)increase from $600 to $800. 
B)decrease from $800 to $300. 
C)decrease from $600 to $300. 
D)remain unchanged at $600.

Quizplus · Accepted Answer

The vertical distance between points A and C represents the tax, which is $300. This tax is passed on to the buyers by increasing the price from $600 to $900. However, the sellers only receive the price of $600, which is shown by point B. Therefore, the price received by sellers decreases from $600 to $300 after the imposition of the tax.

Figure 8-9 the Vertical Distance Between Points a and C Represents a Represents