When a good is taxed,are buyers and sellers worse off or better off

Question

Quizplus · Accepted Answer

When a good is taxed, the price of the good increases, which reduces the quantity demanded by buyers. This leads to a decrease in consumer surplus. On the other hand, the tax reduces the quantity supplied by sellers, leading to a reduction in producer surplus. Thus, both buyers and sellers are worse off due to the tax. Additionally, the tax may also result in a deadweight loss, which represents a loss of total surplus to society.

When a Good Is Taxed,are Buyers and Sellers Worse Off