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lambchop03 lambchop03
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5 years ago
Suppose the government imposes an 8 percent sales tax on clothing items and the tax is levied on sellers. Who pays for the tax in this situation? (Assume that the demand curve is downward sloping and that the supply curve is upward sloping.)

• The tax is borne entirely by the sellers.

• The sellers will pass on the entire sales tax to consumers and therefore the consumers bear the tax.

• The tax will be borne partly by consumers and partly by sellers.

• It is not possible to answer the question without information on price elasticities.
Textbook 
Microeconomics

Microeconomics


Edition: 7th
Authors:
Read 33 times
2 Replies
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Replies
wrote...
#1
5 years ago
The tax will be borne partly by consumers and partly by sellers.
lambchop03 Author
wrote...
#2
5 years ago
This calls for a celebration Person Raising Both Hands in Celebration
¯\_(ツ)_/¯
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