Asked by Elena Martinez on Jun 26, 2024
Verified
A tax on a good
A) raises the price that buyers pay and raises the price that sellers receive.
B) raises the price that buyers pay and lowers the price that sellers receive.
C) lowers the price that buyers pay and raises the price that sellers receive.
D) lowers the price that buyers pay and lowers the price that sellers receive.
Buyers Pay
Refers to situations where the responsibility for covering the cost of a transaction, tax, or fee lies with the buyer rather than the seller.
Sellers Receive
The revenue or payment that sellers get in exchange for providing goods or services in the market.
- Examine how taxation impacts the pricing for consumers and vendors.
Verified Answer
ML
michael layneJun 30, 2024
Final Answer :
B
Explanation :
A tax on a good typically raises the price that buyers pay because the tax is often passed on to consumers in the form of higher prices. At the same time, it lowers the price that sellers effectively receive because part of the price paid by buyers is diverted to the government as tax, reducing the net amount sellers receive.
Learning Objectives
- Examine how taxation impacts the pricing for consumers and vendors.