Question

If 12 thousand dollar tax is placed statutorily on the sellers of new cars and as a result, the price of automobiles, increased by the $3000 then the actual incidence of the tax is __ on the sellers and __ on consumers

Answer 1

The actual incidence of the tax is on the sellers and on consumers. The sellers bear the burden of $12,000 and consumers bear the burden of $3,000.

Step-by-step explanation:

The actual incidence of the tax is on the sellers and on consumers. When a tax is placed on sellers, it typically results in an increase in price for consumers. In this case, the tax of $12,000 on sellers caused the price of automobiles to increase by $3,000. Therefore, the sellers bear the burden of $12,000 and consumers bear the burden of $3,000.

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