When looking at a demand and supply graph, if a tax is implemented on a buyer, the vertical distance between the old and new demand curves at the new equilibrium quantity will be equivalent to the
A)amount of the tax.
B)economic burden of the tax on the buyer.
C)economic burden of the tax on the seller.
D)price of the item.

Question

Quizplus · Accepted Answer

When a tax is implemented on a buyer, the demand curve shifts vertically downwards by the amount of the tax. Therefore, the vertical distance between the old and new demand curves at the new equilibrium quantity will be equivalent to the amount of the tax.

When Looking at a Demand and Supply Graph, If a Tax