Suppose the government imposes a 50-cent tax on the sellers of packets of chewing gum. The tax would

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The imposition of a tax on sellers decreases the supply of the good because it becomes more costly for sellers to provide the product. This decrease in supply, represented by a leftward shift of the supply curve, generally leads to a higher equilibrium price and lower equilibrium quantity, thus discouraging market activity. The tax does not necessarily shift the supply curve upward by a fixed amount, nor does it guarantee that the equilibrium price will rise by the exact amount of the tax. The tax burden is also not evenly split by default; it depends on the elasticities of supply and demand.

Suppose the Government Imposes a 50-Cent Tax on the Sellers