Suppose that congress decides to tax alcohol sellers because they are encouraging immoral behavior. In general, who will bear the burden of a tax on sellers?
A. It will depend on the elasticities of supply and demand.
B. It will be equally shared between buyers and sellers.
C. Sellers.
D. Buyers.
Suppose that congress decides to tax alcohol sellers because they are encouraging immoral behavior. In general, who will bear the burden of a tax on sellers?
A. It will depend on the elasticities of supply and demand.
B. It will be equally shared between buyers and sellers.
C. Sellers.
D. Buyers.
Related textbook solutions
Related questions
1-
If the government increases the tax on a good then the price paid by buyers will ______________ and the price sellers receive will _________________.
| a. |
increase; increase |
|||||||||||||
| b. |
increase; decrease |
|||||||||||||
| c. |
decrease; increase |
|||||||||||||
|
d. decrease; decrease ________________________________________________________ 2- It doesn't matter whether a tax is levied on the buyers or sellers of a good because _____________.
|
