If a $500 tax is placed legally (statutorily) on the sellers of new violins and as a result the price of violins to consumers rises by $400, then the actual burden of the tax
A) falls completely on violin buyers.
B) falls completely on violin sellers.
C) is $400 on violin buyers and $100 on sellers.
D) is $100 on violin buyers and $400 on sellers.

Question

Quizplus · Accepted Answer

The price to consumers rises by $400, indicating that buyers bear $400 of the tax burden, while sellers bear the remaining $100 of the $500 tax.

If a $500 Tax Is Placed Legally (Statutorily) on the Sellers