(Figure: The Market for SUVs) Use Figure: The Market for SUVs.If the government imposes a $60,000 tax on SUVs (collected from the producers) ,consumers will pay _ of the tax and producers will pay _.

A) $30,000;$30,000
B) $40,000;$20,000
C) $20,000;$40,000
D) $10,000;$50,000

Question

(Figure: The Market for SUVs) Use Figure: The Market for SUVs.If the government imposes a $60,000 tax on SUVs (collected from the producers) ,consumers will pay _____ of the tax and producers will pay _____.

A) $30,000;$30,000
B) $40,000;$20,000
C) $20,000;$40,000
D) $10,000;$50,000

Andrew Montor · Accepted Answer

Final Answer : B, Explanation :  The division of tax burden between consumers and producers depends on the elasticity of demand and supply. Without specific details on the elasticity from the figure, a general principle is that the tax burden is shared between consumers and producers, but not necessarily equally. Option B suggests a division of the tax burden, which could be plausible if demand is relatively inelastic compared to supply, leading consumers to bear a larger portion of the tax. However, without the figure or more information, this explanation assumes a typical scenario where tax incidence is shared based on elasticity.

(Figure: The Market for SUVs) Use Figure: The Market for SUVs.If the government imposes a $60,000 tax on SUVs (collected from the producers) ,consumers will pay _ of the tax and producers will pay _.

A) $30,000;$30,000
B) $40,000;$20,000
C) $20,000;$40,000
D) $10,000;$50,000

Definitions

Learning Objectives

Learning Objectives

Related questions

(Figure: The Market for SUVs) Use Figure: The Market for SUVs.If the government imposes a $60,000 tax on SUVs (collected from the producers) ,consumers will pay _____ of the tax and producers will pay _____.A) $30,000;$30,000B) $40,000;$20,000C) $20,000;$40,000D) $10,000;$50,000

Definitions

Learning Objectives

Learning Objectives

Related questions

(Figure: The Market for SUVs) Use Figure: The Market for SUVs.If the government imposes a $60,000 tax on SUVs (collected from the producers) ,consumers will pay _ of the tax and producers will pay _.

A) $30,000;$30,000
B) $40,000;$20,000
C) $20,000;$40,000
D) $10,000;$50,000