If a $10 sales tax is imposed on a good and the equilibrium price increases by $10, the tax is
A)split between buyers and sellers but not evenly.
B)paid fully by sellers.
C)paid fully by buyers.
D)split evenly between buyers and sellers.
E)impossible to determine the incidence of without further information.

Question

Quizplus · Accepted Answer

If the equilibrium price increases by the full amount of the tax, it indicates that the buyers are bearing the entire burden of the tax.

If a $10 Sales Tax Is Imposed on a Good