Suppose an excise tax of $1 is imposed on every case of beer sold and sellers are responsible for paying this tax.How would the imposition of the tax be illustrated in a graph?

Question

Quizplus · Accepted Answer

Since the excise tax is being imposed on the sellers, the cost of production for cases of beer will increase. This increase in cost will result in a decrease in supply at every price level. In other words, the supply curve for cases of beer will shift up by $1. This means that at every price level, sellers will be willing to supply one less case of beer than they were before the tax was imposed.

Suppose an Excise Tax of $1 Is Imposed on Every