Figure 8-10
-Refer to Figure 8-10.Suppose the government imposes a tax that reduces the quantity sold in the market after the tax to Q2.The price that buyers pay is
A)P0.
B)P2.
C)P5.
D)P8.

Question

Figure 8-10 
-Refer to Figure 8-10.Suppose the government imposes a tax that reduces the quantity sold in the market after the tax to Q2.The price that buyers pay is
A)P0. 
B)P2. 
C)P5. 
D)P8.

Quizplus · Accepted Answer

When the quantity sold decreases to Q2 due to the tax, the new market equilibrium is at point E2. At this point, the price buyers pay is P2, as shown on the vertical axis. Therefore, choice B is the correct answer.

Figure 8-10 -Refer to Figure 8-10.Suppose the Government Imposes a Tax That