A tax on the sellers of cameras encourages

Question

Quizplus · Accepted Answer

A tax on sellers increases their costs of production, which leads to a decrease in supply at every price. Therefore, sellers would supply a smaller quantity at every price. A tax does not directly affect buyers' behavior, so option B is incorrect. Option C is incorrect because a tax on sellers would not encourage them to supply a larger quantity at every price. Option D is incorrect because only option A is correct.

A Tax on the Sellers of Cameras Encourages