In what way is the result of an excise tax imposed on either demanders or suppliers similar to the result of a price floor?
A) The amount that consumers pay for the good will be less than they previously paid
B) The amount of the good that will be traded in the market will be greater than previously traded
C) both price floors and excise taxes create excess demand
D) The amount that consumers pay for the good will be greater than they previously paid
E) Both price floors and excise taxes create excess supply

Question

Quizplus · Accepted Answer

Both excise taxes and price floors typically result in higher prices for consumers. An excise tax increases the cost of production or purchase, leading to higher prices, while a price floor sets a minimum price above equilibrium, also resulting in higher consumer prices.

In What Way Is the Result of an Excise Tax