(a) The tax incidence is unaffected by whether the seller or buyer pays the tax. When the seller pays the tax, the supply curve shifts inward by the amount of the tax, P_b – P_s, from S₁ to S₂. The equilibrium quantity decreases from Q₁ to Q₂. The seller now faces price P_s at the equilibrium, while the buyer pays price P_b.
(b) When the buyer pays the tax, the demand curve shifts inward by the amount of the tax, P_b – P_s, from D₁ to D₂. The equilibrium quantity decreases from Q₁ to Q₂. As in panel a, the seller now faces price P_s at the equilibrium, while the buyer pays price P_b.