Figure 8-3 the Vertical Distance Between Points a and B Represents a Represents

question 80

Multiple Choice

Figure 8-3
The vertical distance between points A and B represents a tax in the market.
-Refer to Figure 8-3. Suppose a 20th unit of the good were sold by a seller to a buyer. Which of the following statements is correct?

• A)For the 20th unit, the difference between the buyer's value and the seller's cost is less than the tax per unit.
• B)For the 20th unit, the difference between the buyer's value and the seller's cost is greater than the tax per unit.
• C)For the 20th unit, the difference between the buyer's value and the seller's cost is equal to the tax per unit.
• D)It makes sense for the buyer to buy and for the seller to sell the 20th unit, with or without the tax in place.

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