When the government places a tax on a product,the cost of the tax to buyers and sellers
A)is less than the revenue raised from the tax by the government.
B)is equal to the revenue raised from the tax by the government.
C)exceeds the revenue raised from the tax by the government.
D)Without additional information,such as the elasticity of demand for this product,it is impossible to compare the cost of a tax to buyers and sellers with tax revenue.

Question

Quizplus · Accepted Answer

The cost to buyers and sellers exceeds the tax revenue due to the deadweight loss, which is the loss of economic efficiency when the equilibrium outcome is not achievable or not achieved.

When the Government Places a Tax on a Product,the Cost