A tax of $1 on sellers always increases the equilibrium price by $1.

Name: A tax of $1 on sellers always increases the equilibrium price by $1.
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Question

Quizplus · Accepted Answer

The actual increase in equilibrium price due to a tax on sellers depends on the elasticities of supply and demand. The tax burden is shared between buyers and sellers based on these elasticities, and the price increase seen by buyers is typically less than the full amount of the tax.

A Tax of $1 on Sellers Always Increases the Equilibrium