Question
Exhibit 19-2 Refer to Exhibit 19-2. The market for good x is initially in equilibrium at $5 . The government then places a per-unit tax
Exhibit 19-2\ Refer to Exhibit 19-2. The market for good
x
is initially in equilibrium at
$5
. The government then places a per-unit tax on good
x
, as shown by the shift of
S_(1)
to
S_(2)
. As a result,\ a. consumers end up paying
$6.25
per unit, and producers end up receiving and keeping
$4.00
per unit.\ b. consumers end up paying
$5.00
per unit, and producers end up receiving and keeping
$5.00
per unit.\ c. consumers end up paying
$6.25
per unit, and producers end up receiving
$5.00
per unit, but keeping only
$4.00
per unit.\ d. consumers end up paying
$6.25
per unit, and producers end up receiving
$6.25
per unit, but keeping only
$4.00
per unit.
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