Use the following to answer question:
Figure: Model of a Competitive Market
-(Figure: Model of a Competitive Market)Use Figure: Model of a Competitive Market.Given the figure,if a tax is imposed on sellers,the equilibrium price will _____ and the equilibrium quantity will _____.
A)increase;decrease
B)remain the same;increase
C)remain the same;decrease
D)increase;increase

Question

Use the following to answer question:
Figure: Model of a Competitive Market 
-(Figure: Model of a Competitive Market)Use Figure: Model of a Competitive Market.Given the figure,if a tax is imposed on sellers,the equilibrium price will _____ and the equilibrium quantity will _____.
A)increase;decrease 
B)remain the same;increase 
C)remain the same;decrease 
D)increase;increase

Quizplus · Accepted Answer

When a tax is imposed on sellers, the supply curve shifts upwards by the amount of the tax. This leads to an increase in the equilibrium price and a decrease in the equilibrium quantity. Therefore, the correct choice is A, increase in the equilibrium price and decrease in the equilibrium quantity.

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