If a $5,000 property tax is placed legally (statutorily) on the buyers of new automobiles and as a result the price of automobiles at dealerships rises by $2,000, the actual burden of the tax
A) falls completely on automobile buyers.
B) falls completely on automobile sellers.
C) is $2,000 on automobile buyers and $3,000 on sellers.
D) is $3,000 on automobile buyers and $2,000 on sellers.

Question

Quizplus · Accepted Answer

The price increase of $2,000 indicates that buyers bear $2,000 of the tax burden, while the remaining $3,000 is absorbed by sellers.

If a $5,000 Property Tax Is Placed Legally (Statutorily) on the Buyers