The graph shows the market for washing machines in Kestria after a per-unit tax shifts supply from S1 to S2. Producers now receive $36 and consumers pay $48 per unit, while equilibrium quantity falls from 630 to 180 units. Total tax revenue collected equals
taxes, subsidies, and tax incidence
Review taxes, subsidies, and tax incidence for AP Microeconomics and try 2 free AP-style practice questions. 15 questions on this topic in AP Micro · Unit 2 · Supply and Demand.
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If the supply of coffee beans is perfectly elastic and demand is downward sloping, a per-unit tax on producers changes the price paid by consumers and the after-tax price received by producers as follows: price paid by consumers; after-tax price received by producers
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Answer, then see why
The price of gasoline rises 10% and the quantity demanded falls 5%. What happens to total revenue?
Not quite. The answer is B.
Why the other options are wrong
AI grading for free-response
Write your FRQ answer and get it scored point by point against the AP rubric, with the line from your answer that earned or missed each point.
Question 13 / 4 pts
Part a1 / 1 pts
Point 1: Earned
Grader confidence 94% sureReason: Correctly identifies demand for gasoline as inelastic.
Evidence: "The price of gasoline rises and the quantity falls only a little."
Part b2 / 3 pts
Point 1: Earned
Grader confidence 91% sureReason: Graph shows relatively inelastic demand.
Evidence: Draws a steep demand curve.
Point 2: Earned
Grader confidence 88% sureReason: Correct new equilibrium price.
Evidence: Shifts supply left, P1 → P2.
Point 3: Not earned
Grader confidence 82% sureReason: With inelastic demand, a price increase raises total revenue.
Evidence: "Revenue goes down."