Figure 8-12
-Refer to Figure 8-12.Suppose a $3 per-unit tax is placed on this good.The tax causes the price paid by buyers to
A)decrease by $3.
B)increase by $2.
C)decrease by $1.
D)increase by $6.

Question

Figure 8-12 
-Refer to Figure 8-12.Suppose a $3 per-unit tax is placed on this good.The tax causes the price paid by buyers to
A)decrease by $3. 
B)increase by $2. 
C)decrease by $1. 
D)increase by $6.

Quizplus · Accepted Answer

With a $3 per-unit tax, the supply curve shifts left by $3. This causes the new equilibrium price to increase by $2, as shown by the intersection of the new supply curve (S+tax) and the original demand curve (D). Therefore, buyers will pay $2 more per unit due to the tax.

Figure 8-12 -Refer to Figure 8-12.Suppose a $3 Per-Unit Tax Is Placed