XYZ, Inc. is a seller of the good. XYZ sells a unit of the good to a buyer and then pays the tax on that unit to the government.
1 answer:
Answer: $2
Explanation:
The Supply curve S1 represents the supply before tax. The equilibrium price at this point is therefore $3.
With taxes, the supply curve is S2 and the equilibrium price has now gone up to $5.
The amount that XYZ will be left with after paying the tax is:
= Price after tax - price before tax
= 5 - 3
= $2
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