Figure 4-22



Refer to . Suppose the same S and D curves apply, and a tax of the same amount per unit as shown here is imposed. Now, however, the buyers of the good, rather than the sellers, are required to pay the tax to the government. Now,

a.

the burden on buyers will be larger than in the case illustrated in .

b.

the burden on sellers will be smaller than in the case illustrated in .

c.

a downward shift of the demand curve replaces the upward shift of the supply curve.

d.

All of the above are correct.


c

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