Question

When a tax of $1.00 per gallon is imposed on sellers of gasoline, the supply curve for gasoline shifts upward, but by less than $1.00?

Answer 1

When a tax of $1.00 per gallon is imposed on sellers of gasoline, the supply curve for gasoline shifts upward, but by less than $1.00. A tax on sellers usually causes buyers to pay more for the good and sellers to receive less for the good than they did before the tax was levied.