Figure 8-2
The vertical distance between points C and D represents a tax in the market.

-Refer to Figure 8-2. The imposition of the tax causes the quantity sold to
A)increase by 2 units.
B)decrease by 2 units.
C)increase by 4 units.
D)decrease by 4 units.

Question

Figure 8-2
The vertical distance between points C and D represents a tax in the market.
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-Refer to Figure 8-2. The imposition of the tax causes the quantity sold to
A)increase by 2 units. 
B)decrease by 2 units. 
C)increase by 4 units. 
D)decrease by 4 units.

Quizplus · Accepted Answer

The imposition of a tax typically increases the cost of goods, leading to a decrease in quantity sold. Without seeing Figure 8-2, the general principle is that taxes discourage consumption or production, leading to a decrease in the quantity sold.

Figure 8-2 the Vertical Distance Between Points C and D Represents a Represents