MicroEconomics chapter 6
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a price ceiling is binding when it is set
below the equilibrium price, causing a shortage
a tax on the buyers of the sofas
decreases the size of the sofa market
if a tax is levied on the buyers of a product, then the demand curve will
shift down
if a tax is levied on the sellers of a product, then the supply curve will
shift up
a tax on sellers will shift the
supply curve upward by the amount of the tax
if a price ceiling is not binding then
there will be no effect on the market price or quantity sold