If a $10 Sales Tax Is Imposed on a Good

question 50

Multiple Choice

If a $10 sales tax is imposed on a good and the equilibrium price increases by $10, the tax is

• A) split between buyers and sellers, but not evenly.
• B) split evenly between buyers and sellers.
• C) paid fully by sellers.
• D) paid fully by buyers.
• E) perhaps split between buyers and sellers but it is impossible to determine the incidence without further information.

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