ECON 201 Lecture Notes - Lecture 13: Demand Curve
Document Summary
When the government imposes a tax on sellers, this effectively shifts the supply curve up by that amount. Seller gets price and tax minus the tax. Government imposes a tax on sellers (usual approach) When the price is set, seller will sell what it will sell when price is price plus tax minus the tax. When the supply curve shifts up, supply is decreasing. Consumer pays price plus tax plus another tax. Demand curve shifts down by the tax. In the previous examples, the price paid by buyers is . 30 regardless of who the tax is charged to. The price earned by sellers is . 80, also regardless of who the tax is charged to. I(cid:374) ge(cid:374)eral, it does(cid:374) t (cid:373)ake a differe(cid:374)(cid:272)e whether a ta(cid:454) is assessed o(cid:374) (cid:271)u(cid:455)ers or sellers.