the figure shows the market for beer. the government plans to impose a unit tax in this market. the price…

the figure shows the market for beer. the government plans to impose a unit tax in this market. the price buyers pay after the tax is\na. $7.\nb. $20.\nc. $22.\nd. $27.

the figure shows the market for beer. the government plans to impose a unit tax in this market. the price buyers pay after the tax is\na. $7.\nb. $20.\nc. $22.\nd. $27.

Answer

Explanation:

Step1: Identify price - buyer pays

In a market with a unit - tax, the price buyers pay is the price at the new equilibrium (after the tax is imposed) on the demand curve. Looking at the graph, the intersection of the new supply curve ($S_{tax}$) and the demand curve ($D$) gives the post - tax equilibrium. The price on the vertical axis at this intersection is the price buyers pay. From the graph, the price buyers pay after the tax is $$27$.

Answer:

D. $27