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Assume the government imposes a $2.25 tax on suppliers, which results in a shift of the supply curve from S1 to S2. The price the seller receives for the product after paying the tax is _________

a. $1.25.
b. $2.50.
c. $3.50.
d. $2.25.

Answer :

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Answer:

a. $1.25

Explanation:

From the image, we can determine the seller's position.

As the supply curve moves from [tex]S_{1}[/tex] to [tex]S_{2}[/tex], the sale will become fewer. As the government imposes a $2.25 tax on suppliers, the seller will receive less money despite getting more money for each sale from the customer.

Before imposing the tax, the seller received $2.50 for each sale. After imposing the ban, the supply curve shifts to the left, and the seller receive $3.50 before paying the tax. After paying the tax, the seller receives ($3.50 - 2.25) = $1.25.

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