00:01
So for this question we have to say, we have to explain how does tax on a good effect price paid by buyers, the price received by sellers, and the quantity sold.
00:17
Well, as you probably know, tax is just some extra added on cost to selling a good, so it's going to increase the sort of cost of the good or its price.
00:35
Just because some tax needs to get paid to the relevant government body.
00:41
So as a result of tax, buyers are going to have to pay more.
00:52
Because the sellers are paying tax on a good, they're going to charge more for their good, and therefore buyers have to pay more.
01:05
Sellers are going to receive less because although they might receive more for the good, they're going to have to then pay the tax back, pay more of that tax back to the government.
01:22
So they pay the government on earnings and so for buyers have to pay more to pay more as goods cost more if they are taxed...