A tax on a good is typically imposed on the seller, who then passes on the cost to the buyer in the form of a higher price. This means that buyers pay more for the good, while sellers receive less money for each unit sold. Therefore, choice A is correct.

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A Tax on a Good

Question 60

Multiple Choice

A tax on a good:

A) raises the price buyers pay and lowers the price sellers receive
B) raises the price buyers pay and raises the price sellers receive
C) lowers the price buyers pay and lowers the price sellers receive
D) lowers the price buyers pay and raises the price sellers receive

Correct Answer: