How does a large tax affect the quantity exchanged and tax revenue compared to a small tax?

• A. A large tax decreases the quantity exchanged and may not increase tax revenue significantly.
• B. A large tax increases the quantity exchanged but decreases tax revenue.
• C. A large tax has no effect on the quantity exchanged or tax revenue.
• D. A large tax increases both the quantity exchanged and tax revenue.

Answer: (A)