Within the supply and demand model, a tax collected from the sellers of a good shifts the

Question

Quizplus · Accepted Answer

A tax collected from the sellers of a good increases the cost of production and thus reduces the incentive for suppliers to offer the product at each price level. This results in a leftward, or upward, shift of the supply curve by the amount of the tax. Therefore, the correct answer is D, which states that the tax collected from the sellers of a good shifts the supply curve upward by the size of the tax per unit. The other options are incorrect as they incorrectly identify the direction of the shift.

Within the Supply and Demand Model, a Tax Collected from the Sellers