A tax on sellers:

Question

A tax on sellers:

Quizplus · Accepted Answer

A tax on sellers shifts the supply curve upward by the amount of the tax. As a result, the equilibrium price paid by buyers will increase, but the equilibrium quantity bought and sold will decrease. This is because sellers will receive less revenue from each unit they sell due to the tax, which reduces their incentive to supply the good or service. The decrease in quantity bought and sold reflects the fact that buyers are willing to pay less due to the tax, and sellers are willing to supply less at each price. Thus, choice A is the correct answer.

A Tax on Sellers