Exhibit 5-30 Refer to Exhibit 5-30.Consumers will pay a greater share of a new tax under supply curve S' than under supply curve S.

Question

Exhibit 5-30  Refer to Exhibit 5-30.Consumers will pay a greater share of a new tax under supply curve S' than under supply curve S.

Quizplus · Accepted Answer

The shift of the supply curve to the left (S to S') indicates that the tax has increased the cost of production for producers. This results in a higher equilibrium price for consumers, meaning they will pay a greater share of the tax burden.