A tax placed on a good
A)causes the effective price to sellers to increase.
B)affects the welfare of buyers of the good, but not the welfare of sellers.
C)causes the size of the market for the good to shrink.
D)creates a burden that is usually borne entirely by the sellers of the good.

Question

Quizplus · Accepted Answer

A tax on a good typically reduces the quantity sold, shrinking the market size as it increases the price buyers pay and decreases the price sellers receive.

A Tax Placed on a Good