If a tax shifts the demand curve downward (or to the left),we can infer that the tax was levied on
A)buyers of the good.
B)sellers of the good.
C)both buyers and sellers of the good.
D)We cannot infer anything because the shift described is not consistent with a tax.

Question

Quizplus · Accepted Answer

When a tax is levied on buyers of a good, the price they pay for the good increases which leads to a decrease in demand as buyers are less willing and able to purchase the good at the higher price. This shift is represented by the demand curve shifting downward (to the left). Therefore, if the demand curve shifts downward, we can infer that the tax was levied on the buyers of the good.

If a Tax Shifts the Demand Curve Downward (Or to the Left),we