A tax on sellers causes which of the following?
(i) a leftward shift of the supply curve
(ii) a decrease in quantity sold
(iii) an increase in the price buyers pay
A)(i), (ii), and (iii)
B)(i) and (iii)
C)(ii) and (iii)
D)only (i)

Question

Quizplus · Accepted Answer

A tax on sellers will cause a leftward shift of the supply curve because sellers will now require a higher price to compensate for the tax. This will result in a decrease in quantity sold, as the higher price will cause buyers to demand less. Additionally, the increase in price buyers pay is also a result of the tax. Thus, all three options (i), (ii), and (iii) are correct.

A Tax on Sellers Causes Which of the Following