P,=7 lo=7 On the following diagram if there is a tax of $3 dollars imposed on sellers, what is the tax burden on sellers? $7 $1 $2 $3

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 6QR
icon
Related questions
Question
100%
P=7
l=7
On the following diagram if there is a tax of $3 dollars imposed on sellers, what is
the tax burden on sellers?
$7
$1
$2
$3
Transcribed Image Text:P=7 l=7 On the following diagram if there is a tax of $3 dollars imposed on sellers, what is the tax burden on sellers? $7 $1 $2 $3
Expert Solution
Step 1

Answer:

If a tax of $3 is imposed on sellers then the supply curve will go up by 3 units at each quantity.

Graphical presentation:

Economics homework question answer, step 1, image 1

According to the above figure, the supply curve has shifted up. The new equilibrium occurs at point E. The price received by sellers is $6 after tax. Therefore, the price received by sellers has decreased by 1. It means the tax burden on sellers is 1.

 

trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps with 1 images

Blurred answer
Knowledge Booster
Supply Schedule
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
Essentials of Economics (MindTap Course List)
Essentials of Economics (MindTap Course List)
Economics
ISBN:
9781337091992
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Principles of Economics 2e
Principles of Economics 2e
Economics
ISBN:
9781947172364
Author:
Steven A. Greenlaw; David Shapiro
Publisher:
OpenStax
Economics (MindTap Course List)
Economics (MindTap Course List)
Economics
ISBN:
9781337617383
Author:
Roger A. Arnold
Publisher:
Cengage Learning
Microeconomics
Microeconomics
Economics
ISBN:
9781337617406
Author:
Roger A. Arnold
Publisher:
Cengage Learning
Microeconomics: Private and Public Choice (MindTa…
Microeconomics: Private and Public Choice (MindTa…
Economics
ISBN:
9781305506893
Author:
James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:
Cengage Learning
Macroeconomics: Private and Public Choice (MindTa…
Macroeconomics: Private and Public Choice (MindTa…
Economics
ISBN:
9781305506756
Author:
James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:
Cengage Learning