Suppose Sellers of Perfume Are Required to Send $1

question 47

Multiple Choice

Suppose sellers of perfume are required to send $1.00 to the government for every bottle of perfume they sell.Further,suppose this tax causes the price paid by buyers of perfume to rise by $0.60 per bottle.Which of the following statements is correct?

• A)The effective price received by sellers is $0.40 per bottle less than it was before the tax.
• B)Sixty percent of the burden of the tax falls on sellers.
• C)This tax causes the demand curve for perfume to shift downward by $1.00 at each quantity of perfume.
• D)All of the above are correct.

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