If a tax is levied on the sellers of a product, then the demand curve will a. become flatter. b. not shift. c. shift up. d. shif
1 answer:
If a tax is levied on the sellers of a product, then the demand curve will become flattered.
Option A. becomes flattered.
If a tax is levied on sellers of a product, then the supply decreases, the supply curve will shift to the left. The demand curve will not shift. This is shown in the following figure;
S+tax Price E1 pl p 0 q1 q Quantity х
In the above figure, the x-axis shows quantity and the y-axis shows the price. D is the demand curve and S is the supply curve. As a result of the tax, the supply curve will shift to the left. The price increases from p to p1 and quantity decreases from q to q1.
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