When a tax is levied on a good,
A)neither buyers nor sellers are made worse off.
B)only sellers are made worse off.
C)only buyers are made worse off.
D)both buyers and sellers are made worse off.

Question

Quizplus · Accepted Answer

When a tax is levied on a good, the price of the good increases for buyers, while the sellers receive less revenue due to the tax, leading to a decrease in supply. This makes both buyers and sellers worse off.

When a Tax Is Levied on a Good