Which outcome will occur as a result of a tax,whether the tax is placed on the buyer or the seller
A)size of the market is reduced
B)price the seller receives is higher
C)supply curve will shift upward
D)demand curve will shift upward

Question

Quizplus · Accepted Answer

A tax placed on either the buyer or seller will increase the price of the good or service, which will result in a reduction in the size of the market. Consumers will buy less of the product, and suppliers will produce less because the tax increases the cost of production or consumption of the good. Therefore, the size of the market will decrease. The other options, B, C, and D, are incorrect because they assume a tax will lead to an increase in price or supply or demand, which is not the case.

Which Outcome Will Occur as a Result of a Tax,whether