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

Question

Quizplus · Accepted Answer

When a tax is imposed on buyers, the demand for the product decreases as buyers are deterred from purchasing as much. This causes the equilibrium price to fall. However, the tax increases the price paid by buyers, so sellers are willing to supply less at the lower price. This results in a decrease in quantity supplied.

Suppose a Tax on Buyers Has Been Imposed in the Graph