In the above figure, the imposition of a $0.25 sales tax on sellers will

Question

Question

In the above figure, the imposition of a $0.25 sales tax on sellers will

A) lower the market price paid by buyers of hotdogs by $0.25.

B) raise the market price paid by buyers of hotdogs by $0.25.

C) raise the market price paid by buyers of hotdogs by $0.125.

D) have no effect on the market price of hot dogs.

business economics

Add a comment Improve this question Transcribed image text

Answer 1

Answer #1

Here the demand curve is perfectly elastic . So the whole tax burden is carried by seller . The supply curve shifts left but demand curve is constant . So market price remains same , some supply declines as producer's production cost rises after tax . Answer : D) have no effect on the market price

Add a comment

Answer 2

Similar Homework Help Questions

A tax imposed on the sellers of a good will a. raise both the price buyers...

A tax imposed on the sellers of a good will a. raise both the price buyers pay and the effective price sellers receive. b. raise the price buyers pay and lower the effective price sellers receive. c. lower the price buyers pay and raise the effective price sellers receive. d. lower both the price buyers pay and the effective price sellers receive. Part B. When studying how some event or policy affects a market, elasticity provides information on the a....
The figure above illustrates the market for antifreeze. Suppose the government decides to implement an $8 sales tax on the sellers for every gallon of antifreeze sold

The figure above illustrates the market for antifreeze. Suppose the government decides to implement an $8 sales tax on the sellers for every gallon of antifreeze sold. a) What is the equilibrium price of a gallon of antifreeze before the tax? What is the price paid by buyers after the tax? b) What is the equilibrium quantity of antifreeze before the tax? What is the equilibrium quantity after the tax? c) What is the revenue collected by the government from this tax? d) Do...
The figure above illustrates the market for antifreeze. Suppose the government decides to implement an $8 sales tax on the sellers for every gallon of antifreeze sold.

The figure above illustrates the market for antifreeze. Suppose the government decides to implement an $8 sales tax on the sellers for every gallon of antifreeze sold. a) What is the equilibrium price of a gallon of antifreeze before the tax? What is the price paid by buyers after the tax? b) What is the equilibrium quantity of antifreeze before the tax? What is the equilibrium quantity after the tax? c) What is the revenue collected by the government from this tax? d) Do...

Tax incidence refers to who “feels” the effects of a tax, buyers or sellers. On the...

Tax incidence refers to who “feels” the effects of a tax, buyers or sellers. On the example from the previous page, the $4 tax resulted in buyers paying $3 more (since the market price was $4 without the tax, and the price buyers pay with the tax is $7) and sellers receiving $1 less (since the market price was $4 without the tax and sellers receive $3 with the tax). So, we say the incidence of the $4 tax is...
I need help with these Mcq's please. Thank you 22. In general, the price buyers pay...

I need help with these Mcq's please. Thank you 22. In general, the price buyers pay in a market will decrease if the government increases a binding price floor in that market. b. a. increases a binding price ceiling in that market. decreases a tax on the good sold in that market. d. C. More than one of the above is correct 23. Which of the following is the most likely explanation for the imposition of a price ceiling on...
The diagram above shows how the imposition of a sales tax affects the market. Producer surplus...

The diagram above shows how the imposition of a sales tax affects the market. Producer surplus before the tax is areas a 1, 2, 3, 4 6. 5, 6, 7, 8, 9 c. 1, 2 d. 5,8 The imposition of a tariff in a market will usually result in a. an increase in consumer surplus, an increase in producer surplus, and an increase in total surplus. b. an increase in consumer surplus, an increase in producer surplus, and a decrease...

Refer to Figure 1. Suppose a $3 per-unit tax is imposed on the sellers of this good. How much is the burden of this tax on the buyers in this market

QUESTION #1 Refer to Figure 1. Suppose a $3 per-unit tax is imposed on the sellers of this good. How much is the burden of this tax on the buyers in this market? What price will buyers pay for the good after the tax is imposed? Explain clearly.QUESTION #2 Refer to Figure 1. Suppose a $3 per-unit tax is imposed on the sellers of this good. How much is the burden of this tax on the sellers in this market? What is...
QUESTION 25 Figure: The figure below indicates a tax size of AB. 1 Price + Supply...

QUESTION 25 Figure: The figure below indicates a tax size of AB. 1 Price + Supply + + Demand + + + + + + + + + + 5 10 15 20 25 30 35 40 45 50 55 60 Quantity Refer to Figure 8-7. Which of the following statements is true about tax incidence? a. Buyers pays less tax then the sellers b. Buyers and sellers share the same burden of tax. C. Buyers and sellers both will...
Refer to the above figure and answer the following questions:

Refer to the above figure and answer the following questions: If the government imposes a tax of $8 per shirt, then what will be the tax burden on buyers and what will be the tax burden on sellers? .Did the market grow or shrank as a result of tax? How much was the tax revenue generated as a result? What was the price buyers paid for each shirt before the taxes were imposed and what they paid after the taxes? What was the...

Price D 6 8 Quantity 8. Refer to the above graph. Assume the market for this...

Price D 6 8 Quantity 8. Refer to the above graph. Assume the market for this product is in equilibrium at the intersection of D2 and S. The shift in supply from S to Sz is due to an excise tax imposed on the product. The incidence of the tax is: $1 from the buyers and $3 from the sellers $3 from the buyers and $3 from the sellers $1 from the buyers and $1 from the sellers $4 from...

In the above figure, the imposition of a $0.25 sales tax on sellers will

Homework Answers

Add Answer to:
In the above figure, the imposition of a $0.25 sales tax on sellers will

Post as a guest

Earn Coins

A tax imposed on the sellers of a good will a. raise both the price buyers...

The figure above illustrates the market for antifreeze. Suppose the government decides to implement an $8 sales tax on the sellers for every gallon of antifreeze sold

The figure above illustrates the market for antifreeze. Suppose the government decides to implement an $8 sales tax on the sellers for every gallon of antifreeze sold.

Tax incidence refers to who “feels” the effects of a tax, buyers or sellers. On the...

I need help with these Mcq's please. Thank you 22. In general, the price buyers pay...

The diagram above shows how the imposition of a sales tax affects the market. Producer surplus...

Refer to Figure 1. Suppose a $3 per-unit tax is imposed on the sellers of this good. How much is the burden of this tax on the buyers in this market

QUESTION 25 Figure: The figure below indicates a tax size of AB. 1 Price + Supply...

Refer to the above figure and answer the following questions:

Price D 6 8 Quantity 8. Refer to the above graph. Assume the market for this...

In the above figure, the imposition of a $0.25 sales tax on sellers will

Homework Answers

Add Answer to: In the above figure, the imposition of a $0.25 sales tax on sellers will

Post as a guest

Earn Coins

Add Answer to:
In the above figure, the imposition of a $0.25 sales tax on sellers will