Question

When an excise tax is imposed on buyers, this will cause the ________ curve to shift?

Answer 1

Answer:

For the concerned question at hand, in the situation that when an excise tax is imposed on buyers that will cause the demand curve to shift downward.

Explanation:

The downward shift i the demand curve takes place when the tax is imposed on consumers/ buyers.

Secondly in any other case scenario if there is increased taxation then there would be a upwards upward shift in the supply curve when the tax is imposed on producers.

Answer 2

When an ‘excise tax’ is imposed on buyers, this will cause the demand curve to shift.

Explanation:

• When the ‘excise tax’ is imposed on the buyers then the ‘demand curve’ shifts down according to the ‘amount of the tax’.  

• When the ‘downward shift’ in the ‘demand curve’ takes place due to tax on the buyers, the supply curve shifts upwards in exactly the ‘same magnitude’ when the tax is imposed on the producers.  

• The ‘downward shift’ of the ‘demand curve’ results in declining of the equilibrium price.