If buyers are required to pay a $0.20 tax on each cup of coffee, the demand for coffee will shift:

Name: If buyers are required to pay a $0.20 tax on each cup of coffee, the demand for coffee will shift:
Brand: Quizplus
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Question

Quizplus · Accepted Answer

A tax is a cost to the buyer, so it will increase the price of coffee by $0.20. This will make coffee more expensive, causing buyers to purchase less of it, resulting in a decrease in demand. Therefore, the demand for coffee will shift down by $0.20 per cup.

If Buyers Are Required to Pay a $0