When motorcycles are taxed and sellers of motorcycles are required to pay the tax to the government,
A)the quantity of motorcycles bought and sold in the market is reduced.
B)the price paid by buyers of motorcycles decreases.
C)the demand for motorcycles decreases.
D)there is a movement downward and to the right along the demand curve for motorcycles.

Question

Quizplus · Accepted Answer

When motorcycles are taxed, the cost of buying and selling them increases. This leads to a reduction in the quantity of motorcycles bought and sold in the market, as some buyers may not be willing to pay the higher price, and some sellers may not be able to sell as many motorcycles as before. Therefore, the best choice is A. Choices B, C, and D are not correct because they do not accurately describe the effect of a tax on the market for motorcycles.

When Motorcycles Are Taxed and Sellers of Motorcycles Are Required