The graph shown demonstrates a tax on buyers. Which of the following can be said about the effect of this tax?
A) The tax creates a shortage, and rationing must occur.
B) The tax creates excess supply and the government must buy the excess.
C) The tax creates a shortage, and the government must regulate the market.
D) None of these are correct.
Correct Answer:
Verified
Q122: Q123: What does tax incidence describe? Q124: If the demand curve is more elastic Q125: The incidence of a tax depends on: Q126: Q128: If sellers bear a greater tax burden Q129: Does a tax on buyers affect the Q130: When a tax is placed on buyers: Unlock this Answer For Free Now! View this answer and more for free by performing one of the following actions Scan the QR code to install the App and get 2 free unlocks Unlock quizzes for free by uploading documents
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