What happens to the market when a tax is imposed on a product?

Show Answers

Buyers pay less, sellers receive more, and the quantity traded declines.Buyers pay more, sellers receive less, and the quantity sold rises.Buyers pay less, sellers get more, and the amount sold increases.Buyers pay a higher price, sellers get a lower price, and the quantity sold falls.

Explanation

When a tax is levied on a good, the price that buyers pay increases while the amount sellers receive decreases, resulting in a reduction in the quantity sold.