The effect of a tax on a product is always to reduce the total size of its market.

Name: The effect of a tax on a product is always to reduce the total size of its market.
Brand: Quizplus
Rating: 4.8 (61 reviews)

Question

Quizplus · Accepted Answer

When a tax is imposed on a product, it increases the price that consumers have to pay for it. This makes the product less attractive, reducing the quantity demanded, and shrinking the size of the market. Therefore, the statement is true.

The Effect of a Tax on a Product Is Always