A tax imposed on the sellers of a good will

Question

Quizplus · Accepted Answer

When a tax is imposed on the sellers of a good, it leads to an increase in the cost of production for the sellers, resulting in a decrease in the effective price received by sellers. This shift in costs and revenues will result in a leftward shift in the supply curve. This decrease in supply will lead to an increase in the market price paid by buyers, resulting in a reduction in the equilibrium quantity demanded and supplied.  Therefore, a tax imposed on the sellers of a good will lower the effective price received by sellers and lower the equilibrium quantity.

A Tax Imposed on the Sellers of a Good Will