Suppose There Is Currently a Tax of $100 Per Ticket

question 206

Multiple Choice

Suppose there is currently a tax of $100 per ticket on airline tickets. Sellers of airline tickets are required to pay the tax to the government. If the tax is reduced from $100 per ticket to $80 per ticket, then the

• A)demand curve will shift upward by $20, and the price paid by buyers will decrease by less than $20.
• B)demand curve will shift upward by $20, and the price paid by buyers will decrease by $20.
• C)supply curve will shift downward by $20, and the effective price received by sellers will increase by less than $20.
• D)supply curve will shift downward by $20, and the effective price received by sellers will increase by $20.