When a tax is imposed on consumers the demand curve will:
A)shift downward by the amount of the tax.(True Answer )Correct
B)shift upward by the amount of the tax.
C)shift downward by less than the amount of the tax.
D)not shift since sellers collect per unit taxes.

Question

Quizplus · Accepted Answer

When a tax is imposed on consumers, it increases the cost of the product, which reduces the amount of the good that consumers are willing and able to buy at any given price. This leads to a shift in the demand curve downward by the amount of the tax. The tax is effectively shared by both consumers and producers, with consumers paying part of the tax in the form of higher prices, and producers paying part of the tax in the form of lower revenues.

When a Tax Is Imposed on Consumers the Demand Curve