Which of the following efficiency conditions is violated with the imposition of a sales tax on one good in a perfectly competitive economy?
A)efficiency in product mix
B)efficiency in production
C)efficiency in distribution
D)efficiency in consumption

Question

Quizplus · Accepted Answer

Imposing a sales tax on one good in a perfectly competitive economy distorts the allocation of resources, leading to an inefficient product mix because consumers and producers adjust their behavior based on the tax, rather than purely on their preferences and costs.

Which of the Following Efficiency Conditions Is Violated with the Imposition