Asked by Jallisa Jackson on Jun 20, 2024
Verified
A $1.55 tax levied on the buyers of milkshakes will shift the demand curve
A) upward by exactly $1.55.
B) upward by less than $1.55.
C) downward by exactly $1.55.
D) downward by less than $1.55.
Levied
The act of imposing a tax, fee, or fine by an authority.
Demand Curve
A graphical representation showing the relationship between the price of a good and the quantity demanded by consumers.
Tax
An obligatory fiscal contribution or alternative form of taxation placed on individuals by a governing body with the aim of financing government operations and a range of public expenses.
- Gain insight into the ways taxes influence the curves of supply and demand, and the equilibrium of the marketplace.
Verified Answer
CP
Conley PetermeierJun 21, 2024
Final Answer :
C
Explanation :
A tax levied on the buyers of a product effectively increases the price they have to pay, which decreases the quantity demanded. This is represented by a downward shift in the demand curve by the amount of the tax.
Learning Objectives
- Gain insight into the ways taxes influence the curves of supply and demand, and the equilibrium of the marketplace.