Question

Refer to Figure 6-26. The amount of the tax per unit is a. $4. b. $8....

Refer to Figure 6-26. The amount of the tax per unit is

a.

$4.

b.

$8.

c.

$14.

d.

$10.

A graph of price, P, versus quantity, Q, shows a supply curve, S, rising linearly from (40, 2) to (100, 20), and two parallel, straight line, demand curves, D, and D after tax. Curve D is to the right of Curve D after tax. It descends from (20, 20) to (140, 8), and intersects Curve S at (80, 14). Curve D after tax descends from (0, 14) to (120, 2), and intersects Curve S at (60, 8).
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Answer #1

n B $8 is correct ophon 16 A B = tax Wedge. = Distance of = 16-8 A and B . per unit - A= New Equilibrium - E= old Equilibriun

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