Asked by Simer Sidhu on Jun 22, 2024
Verified
If a tax shifts the supply curve downward,
A) we cannot infer anything because the shift described is not consistent with a tax.
B) we can infer that the tax was levied on sellers of the good.
C) we can infer that the tax was levied on both buyers and sellers of the good.
D) we can infer that the tax was levied on buyers of the good.
Supply Curve
A graphical representation showing the relationship between the price of a good or service and the quantity supplied by producers over a period of time.
Levied
Imposed by authority, typically referring to taxes, fees, or fines.
- Examine how taxation modifies the positioning of supply and demand curves.
Verified Answer
MR
Misty RameyJun 27, 2024
Final Answer :
A
Explanation :
A tax on a good typically shifts the supply curve upward (or to the left), indicating a decrease in supply at any given price because the cost of production increases for sellers. A downward shift would suggest a decrease in costs or an increase in supply, which is not consistent with the imposition of a tax.
Learning Objectives
- Examine how taxation modifies the positioning of supply and demand curves.