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

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

A) Consumers’ tax burden is $3.
B) Consumers’ tax burden is $10
C) Consumers’ tax burden is $5.
D) Consumers’ tax burden is $2.

ANSWER

C