The Graph Shown Depicts a Tax Being Imposed, Causing Demand

question 21

Multiple Choice

The graph shown depicts a tax being imposed, causing demand to shift from D1 to D2. What change does this tax cause?

• A)An increase in consumption from Q1 to Q2
• B)A decrease in consumption from Q2 to Q1
• C)A decrease in the price consumers pay from P3 to P1
• D)A decrease in the price suppliers receive from P3 to P1

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Definitions:

Indifferent

Having no particular interest or sympathy; unconcerned or showing a lack of preference between two or more possibilities.

External Events

Occurrences outside of an individual's or organization's control that can have significant impacts on their actions, decisions, or performance.

Stoic

Pertaining to Stoicism, an ancient Greek philosophy that teaches virtue, wisdom, and endurance as the means to a tranquil and virtuous life.