Either the tax has been imposed on the producer or consumers, the effect on the quantity sold will be same. The tax increases the price for the consumers and decreases the price what the sellers receive. But the tax decreases the quantity sold in the market because the price for the consumer increases.
Hence it can be said that tax should be paid by both producer and consumers because tax is mandatory for whole citizen of the country and tax revenue is used for the protection of the country and for the welfare of the people. Hence it is the duty of the whole people to pay tax.
Get Answers For Free
Most questions answered within 1 hours.