P P=7 lo=7 On the following diagram, if there is a $3 tax imposed on buyers, what is the tax burden on buyers? $7 $1 $2 $3

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Chapter8: Application: The Cost Of Taxation
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P,=7
On the following diagram, if there is a $3 tax imposed on buyers, what is the tax
burden on buyers?
$7
$1
$2
$3
O O
Transcribed Image Text:P,=7 On the following diagram, if there is a $3 tax imposed on buyers, what is the tax burden on buyers? $7 $1 $2 $3 O O
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Step 1

In the given figure, the initial equilibrium is achieved at price of $7 and quantity of 7 units. 

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