When a Tax Is Imposed on a Good,the Resulting Rise

question 252

Essay

When a tax is imposed on a good,the resulting rise in the equilibrium price is usually less than the amount of the tax itself.Why doesn't the equilibrium price rise by the full amount of the tax?

---

Definitions:

Federal Income Tax

A tax levied by the federal government on the annual earnings of individuals, corporations, trusts, and other legal entities.

Time Tracking

The process of recording and measuring the amount of time spent on tasks or activities.

Subcontractors

Independent workers or companies hired on a contractual basis to perform part of the work assigned in a project.

FICO

A data analytics company known for creating the most widely used consumer credit scores that determine creditworthiness.