Within the supply and demand model, a tax collected from the buyers of a good shifts the ?
Correct answer: D. demand curve downward by the size of the tax per unit
- A. supply curve downward by the size of the tax per unit.
- B. Supply curve upward by the size of the tax per unit
- C. demand curve upward by the size of the tax per unit.
- D. demand curve downward by the size of the tax per unit
Explanation
A tax collected from buyers reduces the amount they are willing to pay sellers by the tax per unit, so the demand curve shifts downward by that amount. The equivalent graphical treatment is an upward shift of the supply curve when the tax is collected from sellers.
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Individual consumers, firms and markets are examined through demand and supply, elasticity, consumer choice, production, costs, revenue and the determination of prices and output. The topic also covers market structures such as perfect competition, monopoly and oligopoly, plus market failure, externalities and the distinction between microeconomic decisions and economy-wide outcomes.
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