When a tax is placed on the buyers of a product,a result is that buyers effectively pay
A)less than before the tax,and sellers effectively receive less than before the tax.
B)less than before the tax,and sellers effectively receive more than before the tax.
C)more than before the tax,and sellers effectively receive less than before the tax.
D)more than before the tax,and sellers effectively receive more than before the tax.

Question

Quizplus · Accepted Answer

Placing a tax on buyers shifts the demand curve downward because buyers are willing to pay less with the tax in place. As a result, the equilibrium price decreases, and the equilibrium quantity also decreases. Therefore, buyers effectively pay more than before the tax, and sellers effectively receive less than before the tax.

When a Tax Is Placed on the Buyers of a Product,a