Answer:
Correct option: (C)
Explanation: Ceteris paribus, if the government removes a tax on a good, then the price paid by buyers will decrease, while the (net) price received by the seller will increase.
When a tax has levied the price received by the seller decreases because the seller now pays a part of the price received to the government and the price paid by buyers increases because sellers pass on some parts of tax on buyers. Whereas, in case the government removes the tax the opposite will happen. The price paid by buyers will decrease because sellers will reduce prices. And the price received by sellers will increase because now they do not have to pay the government and they keep the full price paid by buyers.
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