When a Tax Is Placed on a Product,the Price Paid

question 229

Multiple Choice

When a tax is placed on a product,the price paid by buyers

• A)rises,and the price received by sellers rises.
• B)rises,and the price received by sellers falls.
• C)falls,and the price received by sellers rises.
• D)falls,and the price received by sellers falls.

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Definitions:

Payments

Transactions involving the transfer of money from one party to another, often in exchange for goods or services.

Interest Rate

The borrowing cost that a lender imposes on a borrower, designated as a percentage of the principal for the use of property or money.

Years

A unit of time equal to 365 days (366 in a leap year), commonly used as a basic measure for accounting periods, product warranties, and investment horizons.

Discount Rate

In the context of discounted cash flow analysis, it's the rate used to determine the present market value of anticipated cash flows.