If sellers of a product are required to pay a tax, the supply curve for the product will shift left by exactly the size of the tax.

Name: If sellers of a product are required to pay a tax, the supply curve for the product will shift left by exactly the size of the tax.
Brand: Quizplus
Rating: 4.9 (50 reviews)

Question

Quizplus · Accepted Answer

The supply curve will shift left, but not necessarily by the exact size of the tax. The shift depends on how much of the tax burden the seller can pass on to the buyer through higher prices.

If Sellers of a Product Are Required to Pay a Tax