Asked by Yasmin Neves on Jun 26, 2024
Verified
A tax on a good causes the size of the market to increase.
Market Size
The total number of potential buyers and sellers of a particular product or service within a given market.
- Examine the influence of taxation on market dimensions and the actions of market participants.
Verified Answer
AA
Alicia AmparoJul 03, 2024
Final Answer :
False
Explanation :
A tax on a good generally causes the size of the market to decrease because it raises the price for consumers and lowers the effective price received by producers, leading to a reduction in the quantity sold.
Learning Objectives
- Examine the influence of taxation on market dimensions and the actions of market participants.