Suppose Sellers of Liquor Are Required to Send $1

question 66

Multiple Choice

Suppose sellers of liquor are required to send $1.00 to the government for every bottle of liquor they sell.Further,suppose this tax causes the price paid by buyers of liquor 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 liquor to shift downward by $1.00 at each quantity of liquor.
• D) All of the above are correct.