Suppose a tax on sellers has been imposed as shown in the graph.Once the tax is in place,the buyers experience:

Question

Quizplus · Accepted Answer

When a tax is imposed on sellers, the supply curve shifts upward by the amount of the tax, making the equilibrium point shift to the left from point A to point B. As a result, the price paid by buyers increases, while the price received by sellers decreases. This change in price decreases the quantity demanded by buyers as they are less willing to pay the higher price for the same amount of goods. Therefore, the answer is C – a decrease in quantity demanded.

Suppose a Tax on Sellers Has Been Imposed as Shown