A tax on sellers shifts the supply curve upward by exactly the size of the tax.

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A tax on sellers decreases the amount of money sellers receive for each unit sold. As a result, they are willing to supply fewer units at every price level. This shifts the entire supply curve upward by exactly the size of the tax. This is because the supply curve shows the relationship between the price of a good and the quantity supplied, holding all other factors constant. When the tax is imposed, the price that sellers receive falls, so they are willing to supply fewer units at any given price. This results in a shift of the supply curve upward.

A Tax on Sellers Shifts the Supply Curve Upward by Exactly