Final answer:
Items such as the creation of a wedge between the price that buyers pay and sellers receive, increased price buyers pay, resulting deadweight loss, and government revenue are characteristics of taxes. Increasing the price sellers receive is a characteristic of subsidies. Taxes can be shared by both buyers and sellers depending on the market elasticity.
Step-by-step explanation:
To determine whether the items are characteristics of taxes, subsidies, or both, one must understand how each affects market conditions. Taxes are a compulsory financial charge imposed by a government on individuals or entities, while subsidies are financial support extended by the government to encourage the consumption or production of a good.
Shared by both buyers and sellers – Both, as tax incidence can fall on either party depending on elasticities, and subsidies can benefit both parties indirectly.
Create a wedge between the price that buyers pay and the price that sellers receive – Taxes, because they cause a divergence between the final price paid by consumers and the amount received by producers.
Increase the price that sellers receive – Subsidies, by providing financial assistance that can lead to a higher effective sale price for sellers.
Increase the price that buyers pay – Taxes, by adding to the cost that consumers must bear for purchasing a product or service.
Result in deadweight loss – Taxes, as they can cause a reduction in the quantity traded in the market below the efficient market equilibrium, leading to lost societal welfare.
Result in government revenue – Taxes, as they are collected by the government from consumers or producers in the market.
In summary, the characteristics described point to how taxes and subsidies influence market equilibriums, consumer and producer behavior, as well as societal welfare and government finances.