A tax on the buyers of cameras encourages:

• A. buyers to purchase fewer cameras
• B. buyers to purchase more cameras
• C. sellers to increase the supply of cameras
• D. the price of cameras to decrease for buyers

Answer: (A)

Verified step by step guidance

1. Understand the effect of a tax on buyers: When a tax is imposed on buyers, it effectively increases the price they pay for the good, making the good more expensive from the buyer's perspective.
2. Recall the law of demand: As the price of a good increases, the quantity demanded by buyers typically decreases, assuming all else equal.
3. Analyze the options: Since buyers face a higher effective price due to the tax, they are likely to purchase fewer cameras, not more.
4. Consider the supply side: A tax on buyers does not directly affect sellers' costs or incentives to supply more cameras, so sellers are unlikely to increase supply because of the tax.
5. Evaluate price changes: Because buyers pay more due to the tax, the price they pay does not decrease; instead, the market price may adjust, but the tax raises the total price buyers pay.