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Economics (AS & A Level) · May / June 2024 · Paper 13 · Question 13

9708Methods and effects of government intervention in markets

The diagram shows the effect of an indirect tax imposed on cigarettes. The market is initially in equilibrium at point X. Which area represents the incidence of the tax on consumers?

  1. AP1ZYP2
  2. BP1ZWPe
  3. CPeWYP2
  4. DPeXZP1

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Correct answer: B. P1ZWPe

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