A tax on buyers causes which of the following?
(i) a leftward shift of the demand 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

When a tax is imposed on buyers, it increases the price buyers pay (iii), which leads to a decrease in quantity sold (ii) as buyers are less willing and able to buy at the higher price. This decrease in quantity sold is represented by a leftward shift of the demand curve (i), as the demand curve shows the quantity buyers are willing and able to buy at different prices. Therefore, all of the given choices apply in the case of a tax on buyers.

A Tax on Buyers Causes Which of the Following