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FIGURE 18-3 -Refer to Figure 18-3.Suppose That Supply Is Perfectly Elastic and Elastic

Question 106

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FIGURE 18-3 -Refer to Figure 18-3.Suppose that supply is perfectly elastic and the price of this good is initially P<sub>1</sub>.If an excise tax raises the price from P<sub>1</sub> to P<sub>2</sub>,the excess burden of the tax is area A) P<sub>3</sub>AP<sub>4</sub>. B) P<sub>2</sub>BP<sub>3</sub>. C) P<sub>1</sub>CBP<sub>2</sub>. D) BFC. E) P<sub>1</sub>FBP<sub>2</sub>. FIGURE 18-3
-Refer to Figure 18-3.Suppose that supply is perfectly elastic and the price of this good is initially P1.If an excise tax raises the price from P1 to P2,the excess burden of the tax is area


A) P3AP4.
B) P2BP3.
C) P1CBP2.
D) BFC.
E) P1FBP2.

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