A unit tax placed on demanders causes the supply curve to shift downward,shifting part of the tax burden to supplier in the form of lower prices and quantity.

Question

Quizplus · Accepted Answer

A unit tax placed on demanders does not cause the supply curve to shift; instead, it shifts the demand curve downward (or to the left), indicating that at every price, consumers are willing to purchase less due to the tax. The burden of the tax is shared between suppliers and demanders depending on the elasticities of supply and demand.

A Unit Tax Placed on Demanders Causes the Supply Curve