Question

If the government puts a $2 excise tax on a product and as a result, price rises by $0.75, which of the following statements is correct?


A. The government's tax revenue falls.

B. The quantity demanded of the product falls by 37.5%.

C. The sellers pay more of the tax than the buyers.

D. The buyers pay more of the tax than the sellers.


E. The quantity demanded of the product rises by 37.5%.

Answer 1

the answer is option C-The sellers pay more of the tax than the buyers.