(Figure: The Market for Productivity Apps) Use Figure: The Market for Productivity Apps.If the government imposes a tax of $1 in this market,consumers will pay _ more per app and purchase _ fewer apps.

A) $1;5
B) $1;25
C) $0.50;5
D) $0.50;20

Question

(Figure: The Market for Productivity Apps) Use Figure: The Market for Productivity Apps.If the government imposes a tax of $1 in this market,consumers will pay _____ more per app and purchase _____ fewer apps.

A) $1;5
B) $1;25
C) $0.50;5
D) $0.50;20

Edson Chagoya · Accepted Answer

Final Answer : C, Explanation :  When the government imposes a tax of $1 in this market, the equilibrium point will shift from (Q1, P1) to (Q2, P2). Consumers will pay $0.50 more per app, as the tax will be shared between buyers and sellers. The difference between P1 and P2 is $1. Therefore, the seller will receive $0.50 less than before. This will shift the supply curve from S1 to S2. As a result, the quantity demanded will decrease from Q1 to Q2, which is a reduction of 5 apps, as shown in the graph. Hence, the correct answer is C.

(Figure: The Market for Productivity Apps) Use Figure: The Market for Productivity Apps.If the government imposes a tax of $1 in this market,consumers will pay _ more per app and purchase _ fewer apps.

A) $1;5
B) $1;25
C) $0.50;5
D) $0.50;20

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Learning Objectives

Learning Objectives

Related questions

(Figure: The Market for Productivity Apps) Use Figure: The Market for Productivity Apps.If the government imposes a tax of $1 in this market,consumers will pay _____ more per app and purchase _____ fewer apps.A) $1;5B) $1;25C) $0.50;5D) $0.50;20

Definitions

Learning Objectives

Learning Objectives

Related questions

(Figure: The Market for Productivity Apps) Use Figure: The Market for Productivity Apps.If the government imposes a tax of $1 in this market,consumers will pay _ more per app and purchase _ fewer apps.

A) $1;5
B) $1;25
C) $0.50;5
D) $0.50;20