When a tax on a good is enacted,who bears the burden of the tax
A)Buyers and sellers share the burden of the tax regardless of whom it is levied on.
B)Buyers always bear the full burden of the tax.
C)Sellers always bear the full burden of the tax.
D)The full burden of the tax falls on whoever the tax is levied on.

Question

Quizplus · Accepted Answer

When a tax is enacted on a good, both buyers and sellers share the burden of the tax. The tax typically leads to an increase in the price of the good, which means that buyers pay more for the good than they did before the tax was enacted. However, the tax also reduces the amount that sellers receive for selling the good. As a result, both parties are impacted by the tax. The exact amount of the tax that each party bears will depend on the specific market conditions and the elasticity of supply and demand for the good.

When a Tax on a Good Is Enacted,who Bears the Burden