A tax on the buyers of personal computer external hard drives encourages

Question

Quizplus · Accepted Answer

When there is a tax on the buyers of personal computer external hard drives, the price for the buyers goes up. Therefore, buyers would be willing to purchase fewer external hard drives at every price. This results in a decrease in demand, which is captured by choice B. Choice A is incorrect because it suggests that suppliers would respond by decreasing the quantity supplied, but this is not necessarily true. It depends on whether the tax is passed on to the sellers or absorbed by the buyers. Choice C is incorrect because it suggests that buyers would respond by increasing the quantity demanded, but this is not consistent with the law of demand.

A Tax on the Buyers of Personal Computer External Hard