To fund new green energy research, suppose the government requires every buyer of a new car to pay a $100 tax.When compared to the pre-tax equilibrium, such a tax will:

Question

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The tax on new car purchases will likely lead to a decrease in demand or an increase in the effective purchase price, affecting both buyers and sellers. Buyers may pay more overall, and sellers could see reduced demand or receive less for each car after the tax is accounted for. The exact impact on each group's welfare depends on the elasticity of demand and supply, which determines how the tax burden is shared between buyers and sellers.

To Fund New Green Energy Research, Suppose the Government Requires