When a tax is levied on a good,how will the quantity sold and price of the good change
A)The quantity of the good sold will decrease but the price of the good sold will not change.
B)The price of the good sold will increase but the quantity of the good sold will not change.
C)The quantity of the good sold will decrease but the price of the good sold will increase.
D)The price of the good sold will decrease but the quantity of the good sold will increase.

Question

Quizplus · Accepted Answer

When a tax is levied on a good, the suppliers will have to pay more to the government to sell the same quantity of goods. This will make the supply curve shift to the left, resulting in a higher equilibrium price and lower quantity sold. Therefore, both the quantity and the price of the good sold will decrease. However, the price increase will be higher than the quantity decrease. Hence, the correct option is C.

When a Tax Is Levied on a Good,how Will the Quantity