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The figure below illustrates the effect of an excise tax (per unit tax) imposed on buyers (D means demand and S means supply). How much of the tax revenue is actually paid by buyers? Price S $60

The figure below illustrates the effect of an excise tax (per unit tax) imposed on buyers (D means demand and S means supply). How much of the tax revenue is actually paid by buyers? Price S $60

Essentials of Economics (MindTap Course List)
Essentials of Economics (MindTap Course List)
8th Edition
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter6: Supply, Demand And Government Policies
Section: Chapter Questions
Problem 6CQQ
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The figure below illustrates the effect of an excise tax (per unit tax) imposed on buyers (D means demand and S means supply). How much of the tax revenue is actually paid by buyers? Price $60 $40 $30 E 1 E 10 40 50 S after D tax D Quantity
Transcribed Image Text:The figure below illustrates the effect of an excise tax (per unit tax) imposed on buyers (D means demand and S means supply). How much of the tax revenue is actually paid by buyers? Price $60 $40 $30 E 1 E 10 40 50 S after D tax D Quantity
40 O a. 1/4 of the tax revenue. O b. 3/4 of the tax revenue. O c. 1/2 of the tax revenue. O d. 1/3 of the tax revenue. O e. 2/3 of the tax revenue. Check 50 afte D tax
Transcribed Image Text:40 O a. 1/4 of the tax revenue. O b. 3/4 of the tax revenue. O c. 1/2 of the tax revenue. O d. 1/3 of the tax revenue. O e. 2/3 of the tax revenue. Check 50 afte D tax
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