Figure 8-5

-Refer to Figure 8-5.When a tax is imposed in this market,the price buyers effectively pay is
A)$10.
B)$16.
C)$22.
D)between $10 and $16.

Question

Figure 8-5
 
-Refer to Figure 8-5.When a tax is imposed in this market,the price buyers effectively pay is
A)$10. 
B)$16. 
C)$22. 
D)between $10 and $16.

Quizplus · Accepted Answer

When a tax is imposed, the supply curve shifts upwards by the amount of the tax, which is $6 in this case. The equilibrium point shifts to the left, and the new equilibrium price is where the new supply curve intersects with the original demand curve. This occurs at a price of $16, which is the price buyers effectively pay. Therefore, the correct answer is B) $16.

Figure 8-5 -Refer to Figure 8-5.When a Tax Is Imposed in This