Refer to the Graph Shown

question 23

Multiple Choice

Refer to the graph shown. With an effective price floor at P_f, the effect is an implicit tax on:

• A) suppliers shown by area C and a subsidy to consumers of that area.
• B) suppliers shown by area B and a subsidy to consumers of that area.
• C) consumers shown by area C and a subsidy to suppliers of that area.
• D) consumers shown by area B and a subsidy to suppliers of that area.

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Definitions:

Pizza Tax

A hypothetical or symbolic tax imposed on unhealthy food products to discourage consumption and address public health concerns.

Welfare Impact

Welfare Impact refers to the effect on the overall well-being of individuals or communities, often assessed when considering economic policies or market changes.

Subsidy Policy

A government initiative to support or financially assist a sector, reducing costs or encouraging production and consumption.

Government Cost

Expenses incurred by governmental bodies in the execution of policies, projects, and provision of public services.