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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)
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
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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
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
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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