6. Introduction to Taxes and Subsidies
Elasticity and Taxes
Multiple Choice
Multiple ChoiceSuppose that a unit tax of $2 is imposed on producers with initial equilibrium of $10. If the demand curve is vertical and the supply curve is upward-sloping, what will be the price faced by consumers after the tax?
A
$8
B
$10
C
$12
D
There is not enough information.
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