Question

A tax on buyers will cause the equilibrium price paid by the consumer to ______ and the equilibrium quantity to ______.

a. Increase, decrease
b. Increase, increase
c. Decrease, decrease
d. Decrease, increase

Answer 1

When a tax is imposed on buyers, the equilibrium price paid by the consumers decreases and the equilibrium quantity also decreases.

Step-by-step explanation:

In the market, when a tax is imposed on buyers, it shifts the demand curve downward by the amount of tax, as buyers are willing to purchase less at any given price. This leads to a decrease in both the equilibrium price paid by the consumers and the equilibrium quantity. Therefore, the correct answer is d.