If a Tax Shifts the Supply Curve Downward

question 60

Multiple Choice

If a tax shifts the supply curve downward,

• A)we cannot infer anything because the shift described is not consistent with a tax.
• B)we can infer that the tax was levied on sellers of the good.
• C)we can infer that the tax was levied on both buyers and sellers of the good.
• D)we can infer that the tax was levied on buyers of the good.

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Definitions:

Mutual Adjustment

A process of communication and negotiation between parties to adapt to each other's needs or actions.

Mechanistic

Describing a structure or process that is rigidly managed and organized, often emphasizing efficiency, precision, and control.

Differentiation

The process of distinguishing or creating differences, often used in contexts like strategy, where companies make their products or services stand out from competitors.

Standardization

The process of implementing and developing technical standards based on the consensus of different parties to ensure that materials, products, processes, and services are appropriate for their purpose.