Which outcome is the most likely result of the government lowering taxes on a particular good?

A. Supply of the good will decrease.
B. Demand for the good will decrease.
C. Demand for the good will remain the same.
D. Supply of the good will increase.



Answer :

Final answer:

Lowering taxes on a particular good can increase the supply of that good, leading to potential benefits for consumers through lower prices and increased availability.


Explanation:

Lowering taxes on a particular good can lead to an increase in the supply of the good. When taxes are reduced, producers are more incentivized to produce and supply more of the good to the market.

For example, if the government lowers taxes on electric cars, manufacturers might produce more electric cars, leading to an increase in the supply of electric cars in the market.

This change in supply can result in lower prices for consumers and potentially an increase in the quantity demanded due to more affordability.


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