When a tax is levied on a good,what happens to the market price and why
A)The market price falls because quantity demanded falls.
B)The market price falls because quantity supplied falls.
C)The market price rises because both quantity demanded and quantity supplied falls.
D)The market price rises because both quantity demanded and quantity supplied rises.

Question

Quizplus · Accepted Answer

When a tax is levied on a good, the market price typically rises because the tax increases the cost of production or purchase, leading to a decrease in both quantity demanded and quantity supplied.

When a Tax Is Levied on a Good,what Happens to the Market