Answer to Question #255345 in Microeconomics for demi

Question #255345

If the government puts a $2 excise tax on a product and as a result, price rises by $1.75, how much will the seller or buyer pay??

Expert's answer

In this case the buyer will incur the $2 tax with the increase in price. Therefore, the buyer will pay 2+1.75 = $3.75

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