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Fudgin [204]
3 years ago
10

After a tax is imposed on the buyers of bottled water, the price buyers pay is $2.50 per bottle and the price sellers receive is

$1.75. If the equilibrium price was $2.00 before the tax was imposed on the market, how much is the tax per unit
Business
1 answer:
Dafna11 [192]3 years ago
8 0

Answer:

Tax per unit = $0.75

Explanation:

Given:

Buyers pay per unit = $2.50

Sellers receive per unit = $1.75

Equilibrium price = $2.00

Tax per unit = ?

Computation of tax per unit:

Tax per unit = Margin between Buyers pay and Sellers receive.

Tax per unit = Buyers pay per unit - Sellers receive per unit

Tax per unit = $2.50 - $1.75

Tax per unit = $0.75

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