Suppose the government imposes a 20-cent tax on the sellers of iced tea.Which of the following is not correct? The tax would

Question

Quizplus · Accepted Answer

The tax would shift the supply curve upward by 20 cents, reducing the equilibrium quantity and discouraging market activity, but the equilibrium price would not necessarily rise by the full 20 cents due to the sharing of the tax burden between buyers and sellers.

Suppose the Government Imposes a 20-Cent Tax on the Sellers