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23 February, 07:56

Refer to exhibit 20-2. 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 s1 to s2. approximately what percentage of the tax do producers end up paying

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  1. 23 February, 08:24
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    45%

    Explanation:

    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 s1 to s2.

    As a result of the shift in the supply curve a new equilibrium price is established at $6.25

    That implies that the share of the burden that consumers will bear is $1.25 (which represents 55% portion of the tax) - the difference between the previous and new equilibrium prices.

    The other 45% portion of the tax will be borne by the producers
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Home » Business » Refer to exhibit 20-2. 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 s1 to s2. approximately what percentage of the tax do producers end up paying
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