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Suppose sellers of pizzas are required to send Rs

Economics

Suppose sellers of pizzas are required to send Rs.10 to the government for every pizza they sell. Further, suppose this tax causes the price paid by buyers of pizza to rise by Rs. 8 per pizza. Which of the following statements is correct?

a. This tax causes the demand curve for pizza to shift downward by Rs. 8 at each quantity of pizza.

b. The incidence of the tax is summarized by the fact that sellers send the tax payments to the government.

c. Eighty percent of the burden of the tax falls on buyers.

d. All of the above are correct.

Option 1

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