Economics 9708 · AS & A Level · Maximum and minimum prices

Maximum and minimum prices — practice question

What is meant by the incidence of an indirect tax on a product?

  • Athe proportion of the tax paid by the consumer relative to the producer
  • Bthe reduction in output as a result of the imposition of the tax
  • Cthe revenue the tax generates for the government
  • Dthe increase in the hidden economy as a result of tax evasion after the tax is imposed

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