If a $10 sales tax is imposed on a good and the equilibrium price increases by $10, the tax is

Question

Quizplus · Accepted Answer

When the equilibrium price of a good increases by the exact amount of the sales tax, it indicates that the buyers are bearing the full cost of the tax. This is because the increase in price paid by buyers matches the tax imposed, suggesting that sellers have not had to lower their prices to maintain sales, thus passing the entire tax burden onto the buyers.

If a $10 Sales Tax Is Imposed on a Good