Butter and Margarine Are Substitute Goods

question 58

Multiple Choice

Butter and margarine are substitute goods.A tax on butter will have what effect on the market for margarine?

• A) The supply of margarine will increase,causing its price to fall.
• B) The demand for margarine will increase,causing its price to rise.
• C) The demand for margarine will decrease,causing its price to fall.
• D) Both the supply and demand of margarine will decrease,causing price to fall.
• E) The supply of margarine will decrease,causing price to rise.

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