The government imposes a 20 per-unit tax to be legally paid


The demand curve in competitive market is given by P = 60 - 4Qd, where P is price and Qd is the quantity demanded. The supply curve is P = 6Qs, where Qs is the quantity supplied. The government imposes a $20 per-unit tax to be legally paid by consumers. Compared with the pre-tax equilibrium:

(a) Consumers pay an extra $20 per unit, Suppliers receive the same amount per unit.

(b) Consumers pay an extra $12 per unit, Suppliers receive $8 less per unit.

(c) Consumers pay an extra $10 per unit, Suppliers receive $10 less per unit.

(d) Consumers pay an extra $8 per unit, Suppliers receive $12 less per unit.

(e) Consumers pay an extra $4 per unit, Suppliers receive $16 less per unit.

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Business Economics: The government imposes a 20 per-unit tax to be legally paid
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