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.

Principles of Microeconomics (MindTap Course List)

8th Edition

ISBN:9781305971493

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter6: Supply, Demand And Government Policies

Section: Chapter Questions

Problem 4PA

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