Author Question: Tax Burden and Tax FairnessThe graph shows the demand (D) and supply (S) in the market for sugar, ... (Read 228 times)

llesku · **on:** Nov 23, 2022

Tax Burden and Tax Fairness

The graph shows the demand (D) and supply (S) in the market for sugar, where P represents the price for a pound of sugar and Q represents thousands of pounds sold.

Assume that P1=$2.75, P2=$3.05, P3=$5.00, Q1=15, and Q2=46. Suppose the government decides to levy a tax on sugar that shifts the supply curve to S_tax. What is the per-unit tax? What is the tax incidence for consumers? For producers?
◦ $2.25, $0.30, $1.95
◦ $5.00, $5.00, $2.75
◦ $5.00, $2.75, $5.00
◦ $2.25, $1.95, $0.30

char00char · **Reply #1 on:** Nov 23, 2022

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