With a Downsloping Demand Curve and an Upsloping Supply Curve

question 332

Multiple Choice

With a downsloping demand curve and an upsloping supply curve for a product, placing an excise tax on this product will

• A) increase equilibrium price and quantity.
• B) decrease equilibrium price and quantity.
• C) decrease equilibrium price and increase equilibrium quantity.
• D) increase equilibrium price and decrease equilibrium quantity.

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