Figure 18-1

According to the graph in Figure 18-1, the increase in the amount that consumers pay as a result of the tax is
A)1,000.00
B)600
C)400
D)indeterminate.

Question

Figure 18-1

According to the graph in Figure 18-1, the increase in the amount that consumers pay as a result of the tax is
A)1,000.00 
B)600 
C)400 
D)indeterminate.

Quizplus · Accepted Answer

The increase in the amount that consumers pay as a result of the tax is the vertical distance between the original supply curve (S1) and the new supply curve after the tax (S2) at the equilibrium quantity. This distance is equal to $400.

Figure 18-1 According to the Graph in Figure 18-1, the Increase in the Increase