Respuesta :
A tax on suppliers will cause the equilibrium price paid by the consumer to increase and the equilibrium quantity to decrease. The tax would basically make the supplier decide to increase the price of their product. In effect, the consumer would have to pay a higher price because of this incident. Since the price to be paid by the consumer would increase, the equilibrium quantity would eventually increase because the amount to be paid by the consumer is already fixed. When the price per unit would increase, the number of units that can be bought with the specified amount of money will eventually decrease.
A tax on suppliers will cause the equilibrium price paid by the consumer to [tex]\fbox{increase}[/tex] and the equilibrium quantity to [tex]\fbox{decrease}[/tex].
Further Explanation:
Equilibrium Price: Equilibrium price is a level of price where the demand and supply of the goods are equal.
Equilibrium Quantity: Equilibrium price is a level of quantity where the demand and supply of the goods are equal.
The law of demand states that the price of the goods increases when the demand for the goods decreases and vice versa. The increase in the tax would increase the price of the goods then the demand for the goods would decrease as per the demand law. The increase in the demand will result in a decrease in the equilibrium quantity.
Thus, the increase in the price of the product would result in a decrease in the quantity of the product.
Learn more:
1. Learn more about the revenue from property taxes
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2. Learn more about the tax on the profit from selling the fixed assets
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3. Learn more about the personal tax
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Answer details:
Grade: High School
Subject: Economics
Chapter: Equilibrium price and quantity
Keywords: The tax on suppliers, equilibrium price, paid by the consumer, equilibrium quantity, law of demand, price of the goods, quantity demanded, Equilibrium price and quantity, economics.
