In 2017, eBay started charging a 20% value-added tax on fees charged to small businesses in the United Kingdom. Holding all else constant, this would _____ in the United Kingdom.
A)raise the prices that eBay sellers charge their customers
B)shift the supply curve of eBay products to the right
C)lead to increased sales for eBay sellers
D)shift the demand for eBay products to the right

Question

Quizplus · Accepted Answer

The introduction of a 20% value-added tax on fees charged to small businesses by eBay in the United Kingdom would increase the cost of doing business for eBay sellers. To compensate for this increase in costs, sellers are likely to raise their prices, which would result in an increase in the prices that eBay sellers charge their customers.

In 2017, EBay Started Charging a 20% Value-Added Tax on Fees