When a Tax Is Levied on Buyers of a Good

question 98

Multiple Choice

When a tax is levied on buyers of a good,

• A)government collects too little revenue to justify the tax if the equilibrium quantity of the good decreases as a result of the tax.
• B)there is an increase in the quantity of the good supplied.
• C)a wedge is placed between the price buyers pay and the price sellers effectively receive.
• D)the effective price to buyers decreases because the demand curve shifts leftward.

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