Which statement correctly describes the effect of a sales tax on smartphones on price, quantity demanded, and government revenue?

Which statement correctly describes the effect of a sales tax on smartphones on price, quantity demanded, and government revenue?

• A. A sales tax raises the price to buyers, reduces quantity demanded, and increases government revenue; the market experiences no deadweight loss.
• B. A sales tax lowers the price to buyers, reduces quantity demanded, and increases government revenue.
• C. A sales tax raises the price to buyers, increases quantity demanded, and reduces government revenue.
• D. A sales tax raises the price to buyers, reduces quantity demanded, increases government revenue, and may create deadweight loss.

Answer: (D)