When a tax is levied on the sellers of a good:
A)both buyers and sellers are economically worse off
B)only sellers are worse off because they have to pay the tax
C)only buyers are worse off because sellers pass the tax on to them
D)there is no change because sellers will produce a different good for buyers to purchase

Question

Quizplus · Accepted Answer

When a tax is levied on sellers, it affects both the supply curve and the market equilibrium, typically leading to a higher price for buyers and a lower effective selling price for sellers, making both parties economically worse off.

When a Tax Is Levied on the Sellers of a Good