The Following Question Are Based on the Following Diagram, Representing

question 62

Multiple Choice

The following question are based on the following diagram, representing the supply and demand curves for an input:

-If the demand curve is D₀,a tax on the income received by the supplier of this input

• A) increases the demand to D₁.
• B) reduces the quantity sold of the input.
• C) raises the quantity sold of the input.
• D) raises the equilibrium price of the input.
• E) has no effect on the equilibrium price and quantity of the input.

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