When taxes alter individual behavior as people attempt to avoid the tax, efficiency
A)losses are probable.
B)gains are possible.
C)gains are impossible.
D)losses are impossible.

Question

Quizplus · Accepted Answer

When taxes cause individuals to change their behavior to avoid the tax, it can lead to inefficiencies in the market, resulting in potential losses in economic efficiency.

When Taxes Alter Individual Behavior as People Attempt to Avoid