can someone explain me why in some books the Demand and marginal revenue moves and but in other books is the marginal cost that moves. Is this like taxing the demand vs taxing the supply? so the economic incidence is the same?. Thank you. enter image description here

But in other books enter image description here


Sources http://www2.econ.iastate.edu/classes/econ101/choi/ch13monD.htm http://www2.econ.iastate.edu/classes/econ101/choi/ch13monD.htm


Is this like taxing the demand vs taxing the supply?


Taxing consumers reduces their willingness to pay. Therefore demand curve shifts down.

Taxing producers raises their cost of production. Hence the marginal cost curve shifts up.

As long as it's the same amount of per unit tax, the tax creates the same wedge between MR and MC curves, regardless of whether it's on consumers or producers. So the tax incidence is the same.


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