Price (dollars per tire) S + tax 70 60 50 40 D. 30 20 10 10 20 30 40 50 60 70 Quantity (millions of tires per month) The figure above shows the market for tires. The government has imposed a tax on tires, and the buyers pay _ of the tax. O A) $50 B) $60 C) $20 D) $10
Price (dollars per tire) S + tax 70 60 50 40 D. 30 20 10 10 20 30 40 50 60 70 Quantity (millions of tires per month) The figure above shows the market for tires. The government has imposed a tax on tires, and the buyers pay _ of the tax. O A) $50 B) $60 C) $20 D) $10
Macroeconomics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN:9781305506756
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Chapter4: Demand And Demand: Applications And Extensions
Section: Chapter Questions
Problem 5CQ
Related questions
Question
100%
![Price (dollars per tire)
S + tax
70
60
50
40
D
30
20
10
10 20 30 40 50 60 70
Quantity (millions of tires per month)
The figure above shows the market for tires. The government has imposed a tax on
of the tax.
tires, and the buyers pay
A) $50
B) $60
C) $20
D) $10](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F4c6c3461-7492-496f-98bc-6ef78f2648e2%2F82e147b5-e042-4ff8-9eed-536750f95e40%2Fcq6lw1n_processed.png&w=3840&q=75)
Transcribed Image Text:Price (dollars per tire)
S + tax
70
60
50
40
D
30
20
10
10 20 30 40 50 60 70
Quantity (millions of tires per month)
The figure above shows the market for tires. The government has imposed a tax on
of the tax.
tires, and the buyers pay
A) $50
B) $60
C) $20
D) $10
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
Step 1
Initially D is the demand curve and S is the supply curve for tires. Equilibrium is achieved at the point where both the curves intersect each other. At this point, equilibrium price is $50 and quantity is 40 millions tires per month.
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