In a market, a given tax amount per unit is imposed on sellers. The government has now decided to change the imposition of tax from sellers to buyers. That is, now the sellers will not pay any tax, but the buyers will have to pay the same amount of tax as did the sellers. Due to the given change, A. The post-tax market price declines B. The post-tax market price increases. C. The post-tax market price stays the same because tax incidence does not depend on whether the tax is imposed on buyers or sellers. D. It cannot be concluded whether the post-tax market price increases or decreases.

In a market, a given tax amount per unit is imposed on sellers. The government has now decided to change the imposition of tax from sellers to buyers. That is, now the sellers will not pay any tax, but the buyers will have to pay the same amount of tax as did the sellers. Due to the given change, A. The post-tax market price declines B. The post-tax market price increases. C. The post-tax market price stays the same because tax incidence does not depend on whether the tax is imposed on buyers or sellers. D. It cannot be concluded whether the post-tax market price increases or decreases.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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