A tax on the sellers of TVs

Question

Quizplus · Accepted Answer

A tax on the sellers of TVs increases the cost of production for the sellers, which reduces their profit margin. As a result, they will supply a smaller quantity of TVs at every price to maintain their profit margin. This shift in supply results in a higher equilibrium price and a lower equilibrium quantity. Buyers, on the other hand, will adjust their demand according to the higher price and will demand a smaller quantity at every price. Hence, option A is the correct choice.

A Tax on the Sellers of TVs