The Graph Shown Demonstrates a Tax on Sellers

question 104

Multiple Choice

The graph shown demonstrates a tax on sellers. After the tax has been imposed, the sellers produce _______ units, and the post-tax price received for each one sold is _______.

• A) 15; $16
• B) 15; $6
• C) 31; $9
• D) 31; $19

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Definitions:

Quantity Demanded

The full quantity of a good or service that consumers are inclined and financially capable of purchasing at a designated price.

Price Elasticity

An indicator for the degree to which the supply or demand level of a good adjusts following a change in its price.

Midpoint Method

A technique used in economics to measure the elasticity of demand or supply, which calculates the percentage change between two points by dividing the difference by the average of those points.

Luxury

A luxury item is a good or service that is considered to be of high quality, often resulting in higher prices and perceived as non-essential but desirable if one has the means.