Asked by Hikkmatjit Saini on Jun 19, 2024
Verified
Refer to Figure 6-21. If the government imposes a tax of $6 per unit in this market, who will bear the greater burden of the tax - the buyers, the sellers, or will the burden be shared equally?
Tax Burden
The impact of taxation on an individual or entity, often expressed as a percentage of income or revenue.
Government Imposes
The act of establishing regulations, taxes, or penalties by the government on businesses or citizens.
Per Unit
A term used to express the cost, price, or quantity concerning a single unit of a product or service.
- Assess the fiscal charges imposed on buyers and sellers in a commercial setting.
Verified Answer
AE
Ariana EdwardsJun 23, 2024
Final Answer :
With a $6 tax per unit, the burden of the tax on buyers is $4 and the burden of the tax on sellers is $2. Therefore, buyers will bear a greater burden of the tax.
Learning Objectives
- Assess the fiscal charges imposed on buyers and sellers in a commercial setting.