If Uber is required to start paying the value added tax (VAT)in Great Britain,this will have the potential to ________ the equilibrium price in this market and,therefore,________ efficiency.
A)raise; increase
B)raise; decrease
C)lower; increase
D)lower; decrease

Question

Quizplus · Accepted Answer

Imposing VAT on Uber would likely increase the cost of rides, raising the equilibrium price. This could lead to a decrease in efficiency as the tax creates a distortion in the market, potentially reducing the quantity of rides demanded and supplied.

If Uber Is Required to Start Paying the Value Added