The Graph Shown Demonstrates a Tax on Buyers

question 12

Multiple Choice

The graph shown demonstrates a tax on buyers. Which of the following can be said about the effect of this tax?

• A)The tax creates a shortage, and rationing must occur.
• B)The tax creates excess supply and the government must buy the excess.
• C)The tax creates a shortage, and the government must regulate the market.
• D)None of these are correct.

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Definitions:

Lateral Conflict

Disputes or disagreements that occur between businesses at the same level in a distribution channel, such as two retailers.

Horizontal Conflict

A disagreement or dispute occurring between businesses at the same level in a distribution channel, such as retailers or wholesalers, often over competition for the same customers.

Distributor Conflict

Disagreements or disputes between a manufacturer and its distributors, often related to pricing, territory, or market strategy.

Buyer Requirement

The specific criteria or conditions that customers demand when purchasing products or services.