Based on the figure below. Starting from long-run equilibrium at point C, a tax increase that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies.

Goods that are heavily taxed, such as alcohol and cigarettes, often have:

a. relatively inelastic demand, such that the tax burden falls primarily on sellers and the deadweight loss associated with the tax is smaller than if demand were elastic. b. relatively elastic demand, such that the tax burden falls primarily on sellers and the deadweight loss associated with the tax is smaller than if demand were inelastic. c. relatively inelastic demand, such that the tax burden falls primarily on buyers and the deadweight loss associated with the tax is smaller than if demand were elastic. d. relatively elastic demand, such that the tax burden falls primarily on buyers and the deadweight loss associated with the tax is smaller than if demand were inelastic.

If a cartel is formed in order to maximize the total profits of its members, it will

a. charge the monopoly price, but produce more output than a monopoly would b. produce the monopoly output, but charge a lower price than a monopoly would c. charge the same price, and produce the same quantity that a monopoly would d. charge a higher price and produce more output than a monopoly would e. charge the monopoly price, but total output may be higher or lower than a monopoly's