Figure 4-22

-Refer to Figure 4-22.Suppose the same S and D curves apply,and a tax of the same amount per unit as shown here is imposed.Now,however,the buyers of the good,rather than the sellers,are required to pay the tax to the government.Now,
A)the burden on buyers will be larger than in the case illustrated in Figure 4-22.
B)the burden on sellers will be smaller than in the case illustrated in Figure 4-22.
C)a downward shift of the demand curve replaces the upward shift of the supply curve.
D)All of the above are correct.

Question

Figure 4-22
 
-Refer to Figure 4-22.Suppose the same S and D curves apply,and a tax of the same amount per unit as shown here is imposed.Now,however,the buyers of the good,rather than the sellers,are required to pay the tax to the government.Now,
A)the burden on buyers will be larger than in the case illustrated in Figure 4-22. 
B)the burden on sellers will be smaller than in the case illustrated in Figure 4-22. 
C)a downward shift of the demand curve replaces the upward shift of the supply curve. 
D)All of the above are correct.

Quizplus · Accepted Answer

When buyers are required to pay the tax, the demand curve shifts downward by the amount of the tax, replacing the upward shift of the supply curve when sellers pay the tax. The burden distribution remains the same.

Figure 4-22 -Refer to Figure 4-22.Suppose the Same S and D Curves