A government-imposed tax on a market shrinks the size of the market.

Name: A government-imposed tax on a market shrinks the size of the market.
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Question

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When a tax is imposed on a market, it increases the price that buyers have to pay and decreases the amount of sales. This leads to a reduction in the size of the market, as fewer people are willing to pay the higher price for the same goods or services.

A Government-Imposed Tax on a Market Shrinks the Size of the Market