Figure7-2An Excise Tax Imposed on Hotel Owners A $40 per room tax imposed on hotel owners shifts the supply curve from S1 to S2, an upward shift of T = $40. The equilibrium price of hotel rooms rises from $80 to $100 a night, and the equilibrium quantity of rooms rented falls from 10 000 to 5000. Although hotel owners pay the tax, they actually bear only half the burden: the price they receive net of tax falls only $20, from $80 to $60. Guests who rent rooms bear the other half of the burden, because the price they pay rises by $20, from $80 to $100.