How does the demand curve shift when a tax is collected from the sellers?
How does the demand curve shift when a tax is collected from the sellers?
Homework Answers
When tax is collected from sellers then such tax increases the cost of production of sellers and reduce their profit margin inducing them to reduce production and thereby supply.
So, when tax is collected from sellers then in that case supply curve shifts to the left. This indicates a decrease in supply due to tax.
Imposition of tax increases the price of the good.
However, there is no impact on demand for the good but quantity demanded of the good reduces due to increase in price due to tax.
Shift of demand curve happens when there is change in demand.
Tax on sellers do not impact demand for the good.
Thus,
The demand curve does not shift when a tax is collected from the sellers.
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How does the demand curve shift when a tax is collected from the sellers?
How does the supply curve shift when a tax is collected from the sellers?
How does the supply curve shift when a tax is collected from the sellers?
How does the supply curve shift in the presence of tax?
How does the supply curve shift in the presence of tax?
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