Refer to Figure 6-13. Suppose buyers, rather than sellers, were required to pay this tax (in the same amount per unit as shown in the graph) . Relative to the tax on sellers, the tax on buyers would result in

A) buyers bearing a larger share of the tax burden.
B) sellers bearing a smaller share of the tax burden.
C) the same amount of tax revenue for the government.
D) an increase in the amount of tax revenue for the government.

Question

Toure Oumou · Accepted Answer

Final Answer : C, Explanation :  When a tax is imposed, whether it is on buyers or sellers does not affect the total amount of tax revenue collected by the government. The division of the tax burden between buyers and sellers depends on the elasticities of supply and demand, not on who officially pays the tax.

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