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When a Tax Is Imposed on Sellers, the Supply Curve

Question 15

Multiple Choice

When a tax is imposed on sellers, the supply curve shifts so that the vertical distance between the old and the new supply curve equals the


A) tax multiplied by the price elasticity of demand.
B) amount of the tax.
C) tax multiplied by the price elasticity of supply.
D) tax divided by the price elasticity of demand.

Correct Answer:

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