The above below represents the perfectly competitive market for pumpkins both before and after the imposition of a tax on suppliers,which is represented by the shift of the supply curve from Supply 1 to Supply 2.Price ($)8.507.255.50B700a.$7.25b. $8.50A1,200Supply 2Supply 1DemandQuantity ofpumpkinsBased on the figure above, what will be the sticker price after the tax is imposed?Note: Since the tax is paid by suppliers, it has to be included in the sticker price paid by the consumer.C. $5.50d. None of the other options are correct

Please find the answer below. IMPOSITION OF TAX: Taxation is the imposition of compulsory levies…

The above below represents the perfectly competitive market for pumpkins both before and after the imposition of a tax on suppliers, which is represented by the shift of the supply curve from Supply 1 to Supply 2. Price ($) 8.50 7.25 5.50 0 B 700 1,200 Supply 2 Supply 1 Demand Quantity of pumpkins Based on the figure above, what will be the sticker price after the tax is imposed? Note: Since the tax is paid by suppliers, it has to be included in the sticker price paid by the consumer. a. $7.25 O b. $8.50 O c. $5.50 Od. None of the other options are correct

The above below represents the perfectly competitive market for pumpkins both before and after the imposition of a tax on suppliers, which is represented by the shift of the supply curve from Supply 1 to Supply 2. Price ($) 8.50 7.25 5.50 0 B 700 1,200 Supply 2 Supply 1 Demand Quantity of pumpkins Based on the figure above, what will be the sticker price after the tax is imposed? Note: Since the tax is paid by suppliers, it has to be included in the sticker price paid by the consumer. a. $7.25 O b. $8.50 O c. $5.50 Od. None of the other options are correct

Microeconomics A Contemporary Intro

10th Edition

ISBN:9781285635101

Author:MCEACHERN

Publisher:MCEACHERN

Chapter5: Elasticity Of Demand And Supply

Section5.A: Appendix: Price Elasticity And Tax Incidence

Problem 1AQ

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Question

The above below represents the perfectly competitive market for pumpkins both before and after the imposition of a tax on suppliers,
which is represented by the shift of the supply curve from Supply 1 to Supply 2.
Price ($)
8.50
7.25
5.50
B
700
a.
$7.25
b. $8.50
A
1,200
Supply 2
Supply 1
Demand
Quantity of
pumpkins
Based on the figure above, what will be the sticker price after the tax is imposed?
Note: Since the tax is paid by suppliers, it has to be included in the sticker price paid by the consumer.
C. $5.50
d. None of the other options are correct

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