Use the Figure Below to Answer the Following Question(s)

question 109

Multiple Choice

Use the figure below to answer the following question(s) .
Figure 4-7

-Refer to Figure 4-7.The supply curve S₁ and the demand curve D indicate initial conditions in the market for gasoline.A $.60-per-gallon excise tax on gasoline is levied,which shifts the supply curve from S₁ to S₂.Imposing the tax causes the equilibrium price of gasoline to increase from

• A)$.80 to $1.40.
• B)$.80 to $1.50.
• C)$.90 to $1.50.
• D)$.90 to $1.40.

---

Definitions:

Fixed Assets

Long-term tangible assets held for business use and not expected to be converted to cash in the upcoming fiscal year.

Sales Capacity

The maximum volume or number of units a company can sell under current resources and market conditions.

Projected Future Sales

An estimate of the amount of sales or revenues that a company expects to achieve in a future period.

Debt-Equity Ratio

An index showing the relative financing contribution of equity and debt to a company's assets.