Question

Tattoo Tax Arkansas imposes a 6% tax on tattoos and body piercings to discourage this behavior, meaning that the people of Arkansas pay extra when getting inked or pierced.
Suppose that government officials in Arkansas decide to raise the tattoo tax (assume that the demand for tattoos is fairly elastic). If this tax is raised, we would expect the consumer surplus to:

A. increase.
B. stay the same.
C. decrease

Answer 1

Answer:

c

Explanation:

customers surplus is going to decrease due to the tax increase, some of the customers may not afford and that may affect Arkanas financial performance