Suppose That a Specific Tax of $3 Is Imposed on Producers

question 96

Multiple Choice

Suppose that a specific tax of $3 is imposed on producers of bread.The bread market supply is Qs = 10 + 0.5P and the bread market demand is Qd = 100-P.What is the producers' tax burden?

• A) Producers' tax burden is $1.30.
• B) Producers' tax burden is $3.00.
• C) Producers' tax burden is $2.00.
• D) Producers' tax burden is $2.30

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