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Figure: Supply and Demand If the Government Places a Tax

Question 62

Multiple Choice

Figure: Supply and Demand Figure: Supply and Demand If the government places a tax on sellers of $0.67 per unit in this market, who will bear the burden of the tax? A) Sellers will pay 100 percent of the tax in the form of lower prices. B) The tax will be split 50-50 between sellers and buyers. C) Buyers will pay the majority of the tax. D) Sellers will pay the majority of the tax. If the government places a tax on sellers of $0.67 per unit in this market, who will bear the burden of the tax?

A) Sellers will pay 100 percent of the tax in the form of lower prices.
B) The tax will be split 50-50 between sellers and buyers.
C) Buyers will pay the majority of the tax.
D) Sellers will pay the majority of the tax.

Correct Answer: