Vertical Shift in Supply Curve Represents Specific Tax

Steps:

• Original supply curve S shows producers' willingness to supply before tax.
• After-tax supply curve S1 shifts upward by the tax amount per unit.
• Specific tax is the constant vertical distance between S and S1 at any quantity.
• At equilibrium quantity, this distance is labeled WT, equaling the tax per bottle.

Why B is correct:

• In tax incidence diagrams, the vertical distance between pre- and post-tax supply curves equals the specific tax per unit, as per standard microeconomic analysis.

Why the others are wrong:

• A. UT: Represents change in quantity or surplus, not the tax shift.
• C. WU: Measures partial price increase to consumers, excluding full tax.
• D. WX: Indicates producer price reduction or deadweight loss segment.

Final answer: B