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Assume a Unit Tax of $4 Is Placed on Suppliers

Question 15

Multiple Choice

Assume a unit tax of $4 is placed on suppliers.They are able to pass along some of the tax to suppliers as evidenced by prices rising from $5 per unit to $7 per unit.Output declines from 10 units to 8 units.What is the ratio of the demander's share of the tax burden to the suppliers?


A) 2.5
B) 2.0
C) 1.5
D) 1.0

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