A tax on the buyers of sofas a. increases the size of the sofa market. b. has no effect on the size of the sofa market. c. may increase, decrease, or have no effect on the size of the sofa market. d. decreases the size of the sofa market.

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Business

Yair Key

11 November, 09:43

A tax on the buyers of sofas a. increases the size of the sofa market. b. has no effect on the size of the sofa market. c. may increase, decrease, or have no effect on the size of the sofa market. d. decreases the size of the sofa market.

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Liana · Answer 1

d. decreases the size of the sofa market.

Explanation:

Buyers of sofas form the market for sofas. They are the customers who buy the sofas. If a tax is imposed on the buyers, it decreases their disposable income. The demand for sofas is likely to drop as the ability of the buyers to purchase is reduced.

As buyers form the markets of a product, a decline in their purchasing power results in a reduction in the quantity demanded. The market for sofas will decline as a portion of customers will not afford them.