A per-unit tax imposed on a product in market A leads to an increase in its price.This causes some consumers to switch to another product in market B.This in turn drives up the price in market B.When the price in market B rises,it causes the demand for the product in market A to rise.The impact in market A is known as the:

Question

Quizplus · Accepted Answer

The described scenario is an example of the feedback effect, where a change in one market (market A) affects another market (market B), which in turn affects the original market (market A) again. This creates a feedback loop where the impact is felt in both markets.

A Per-Unit Tax Imposed on a Product in Market a Leads