Exhibit 20-2 -Refer to Exhibit 20-2.The Market for Good X Is Initially

Multiple Choice

Exhibit 20-2

-Refer to Exhibit 20-2.The market for good X is initially in equilibrium at $5.The government then places a per-unit tax on good X,as shown by the shift of S₁ to S₂.As a result,

A) consumers end up paying $6.25 per unit, and producers end up receiving $5.00 per unit, but keeping only $4.00 per unit.
B) consumers end up paying $6.25 per unit, and producers end up receiving and keeping $4.00 per unit.
C) consumers end up paying $5.00 per unit, and producers end up receiving and keeping $5.00 per unit.
D) consumers end up paying $6.25 per unit, and producers end up receiving $6.25 per unit, but keeping only $4.00 per unit.
E) none of the above