Researchers have found that tax increases may have a small effect in the quantity purchased because
A) individuals might forget about the tax (salience).
B) individuals are rational.
C) individuals are credit constrained.
D) individuals do not care about prices.

Question

Quizplus · Accepted Answer

When taxes are not very salient, individuals might not remember to adjust their purchasing decisions based on the new price, leading to a smaller effect on quantity demanded.

Researchers Have Found That Tax Increases May Have a Small