14 S T 5 0 2 4 67 8 10 12 14 16 Quantity The graph illustrat

$14+ S+ T 5 0 2 4 67 8 10 12 14 16 Quantity The graph illustrates the market for a product on which an excise tax has been imposed by government. What is the amount of the tax per unit of product? O $3 O s8

Solution

As it can be seen in the diagram that an excess tax has been imposed on sellers, so the supply curve shifts leftward from S to the (S+T) curve. The tax per unit is the distance between X and Z and it is $3 per unit of the product.

Hence option first is the correct answer.