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
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Question
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![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](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F4c6c3461-7492-496f-98bc-6ef78f2648e2%2Fb5ec4e78-a98d-42f6-8dcd-30ed1c81d757%2F6gheeq_processed.png&w=3840&q=75)
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
![](/static/compass_v2/shared-icons/check-mark.png)
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:
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.
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