Asked by Mason Smith on Jun 25, 2024
Verified
Refer to Figure 6-21. If the government imposes a tax of $6 per unit in this market, how much is the burden of the tax on the buyers in this market?
Tax Burden
The total amount of tax paid by individuals or corporations, often expressed as a percentage of income or GDP.
Buyers
Individuals or entities that purchase goods or services from a seller in exchange for money.
Per Unit
A measure expressing the cost, price, or quantity with respect to a single unit of goods or services.
- Compute the tax liability for both consumers and merchants within a marketplace.
Verified Answer
ZK
Zybrea KnightJul 02, 2024
Final Answer :
With a $6 tax per unit, the price buyers pay will rise from $8 to $12 per unit. Therefore, the burden of the tax on buyers is $4 per unit.
Learning Objectives
- Compute the tax liability for both consumers and merchants within a marketplace.