Does a tax on sellers affect the demand curve?
A. No, there is change in the quantity demanded, but the demand curve does not move.
B. Yes, it shifts to the left by the amount of the tax.
C. Yes, it shifts to the right by the amount of the tax.
D. Yes, it shifts up by the amount of the tax.
Answer: A
You might also like to view...
Humana Hospital's price/marginal cost ratio of 2.3 is most likely to decline if
A) the number of nearby hospitals increases. B) the number of nearby hospitals decreases. C) the demand curve for hospital services shifts rightward. D) the demand curve for hospital services becomes steeper.
Exhibit 10-4 Kinked demand curves
In Exhibit 10-4, the exhibit represents a kinked-demand oligopoly model. Suppose the current price is $50. If one firm in the oligopoly now attempts to raise price, all firms will:
A. follow along demand curve D1. B. follow along demand curve D2. C. ignore this price increase and cause the price-raising firm to move along D1. D. ignore this price increase and cause the price-raising firm to move along D2.