When a Tax Is Assessed on Producers

question 10

Multiple Choice

When a tax is assessed on producers,

• A)the amount of the product traded does not change because demand is unaffected.
• B)the price of the product does not change because the tax is on producers.
• C)consumers bear the brunt of the tax because producers simply pass their costs on to the buyers of the good.
• D)the price of the product always goes up by the amount of the tax.
• E)the product price typically does not rise by the full amount of the tax.

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