Suppose that in Canada the government places a $1,500 tax on the buyers of new snowmobiles.After the purchase of a new snowmobile, a buyer must pay the government $1,500.How would the imposition of the tax on buyers be illustrated in a graph?

Question

Quizplus · Accepted Answer

The imposition of the tax on buyers would cause a decrease in demand, shifting the demand curve down by the amount of the tax ($1,500). Buyers will be willing to buy fewer snowmobiles at each price point, leading to a reduction in the quantity demanded. The supply curve would remain unaffected by the tax.

Suppose That in Canada the Government Places a $1,500 Tax