A tax on sellers will cause the equilibrium market price to rise but the equilibrium quality sold will fall.

Name: A tax on sellers will cause the equilibrium market price to rise but the equilibrium quality sold will fall.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

When a tax is imposed on sellers, their costs of production increase, causing a leftward shift in the supply curve. This leads to a higher equilibrium price for the buyer but a lower equilibrium quantity sold by the seller. Therefore, the statement is true.

A Tax on Sellers Will Cause the Equilibrium Market Price