What effect does a tax placed on kite buyers have
A)It shifts demand upward, causing both the price received by sellers and the equilibrium quantity to fall.
B)It shifts demand downward, causing both the price received by sellers and the equilibrium quantity to fall.
C)It shifts supply downward, causing the price received by sellers to fall and equilibrium quantity to rise.
D)It shifts supply upward, causing the price received by sellers to rise and equilibrium quantity to fall.

Question

Quizplus · Accepted Answer

Placing a tax on kite buyers will increase the price that consumers have to pay for the kites. This will lead to a decrease in demand as fewer people will be willing or able to pay the new higher price. As a result, the equilibrium quantity will also fall in addition to the price received by sellers. Therefore, the correct choice is B.

What Effect Does a Tax Placed on Kite Buyers Have