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When a Sales Tax Is Imposed on Sellers, the Supply

Question 225

Multiple Choice

When a sales tax is imposed on sellers, the supply curve shifts so that the vertical distance between the old and the new supply curve equals the


A) sales tax multiplied by the price elasticity of demand.
B) sales tax multiplied by the price elasticity of supply.
C) amount of the sales tax.
D) sales tax divided by the price elasticity of demand.

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