Suppose that an ad valorem tax of 10% is imposed on producers of butte

Suppose that an ad valorem tax of 10% is imposed on producers of butter. The bread market supply is Qs = 10 + P and the bread market demand is Qd = 220-P. What is the producers’ tax burden?

A) Producers’ tax burden is $8.
B) Producers’ tax burden is $10
C) Producers’ tax burden is $4.
D) Producers’ tax burden is $5.

ANSWER

D