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Refer to the Figure Above

Question 19

Multiple Choice

Refer to the figure above. The graph represents automobile consumers and suppliers in a country that relies on imports. Curve D is domestic demand, Curve S is domestic supply and Curve I is the import supply curve. Assume that this country imposes emissions restrictions on automobiles that changes domestic supply to S' and import supply to I'. The result of this emission policy is


A) an increase of imports from q1 to q2.
B) a decrease of domestic supply from q0 to q2.
C) a decrease of domestic demand from q0 to q2.
D) all of the above.

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