Within the supply and demand model, a tax collected from the sellers of a good shift the ?
Correct answer: D. supply curve upward by the size of the tax per unit
- A. demand curve downward by the size of the tax per unit.
- B. supply curve downward by the size of the tax per unit
- C. demand curve upward by the size of the tax per unit.
- D. supply curve upward by the size of the tax per unit
Explanation
A tax collected from sellers raises the cost of supplying each unit, shifting the supply curve upward by the per-unit tax. The resulting higher buyer price and lower seller net price divide the tax burden between the two sides.
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About Public Finance
Government revenue and expenditure are analysed through taxation, public borrowing, budgets, subsidies, transfers and public debt. The topic explains how fiscal policy affects resource allocation, income distribution, economic stability and growth, while distinguishing direct from indirect taxes, progressive from regressive taxation, and public goods from goods supplied by private markets.
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