Supposce the government introduces a specific tax of £5 a unit on a product which has sloping supply and demand curves. Which of the following statements about the resulting curve S+tax is true? a) The gap between S+tax and S will be higher at high quantities than at low quantities. b) The gap between S+tax and S will be higher at low quantities than at high quantities. c) The gap between S+tax and S will be £5 at each quantity. d) The gap between S+tax and S will be whatever is needed to show that the equilibrium price for consumers increases by £5.
Posted on: Tue, 13 Jan 2015 07:42:21 +0000
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