Figure 8-3
The vertical distance between points A and C represents a tax in the market.
-Refer to Figure 8-3.The per unit burden of the tax on buyers is
A)P3 - P1.
B)P3 - P2.
C)P2 - P1.
D)P4 - P3.

Question

Figure 8-3
The vertical distance between points A and C represents a tax in the market. 
-Refer to Figure 8-3.The per unit burden of the tax on buyers is
A)P3 - P1. 
B)P3 - P2. 
C)P2 - P1. 
D)P4 - P3.

Quizplus · Accepted Answer

The per unit burden of the tax on buyers is the difference between the price paid by buyers before the tax (P2) and the new higher price they must pay after the tax (P3). Therefore, the answer is P3 - P2.

Figure 8-3 the Vertical Distance Between Points a and C Represents a Represents