Holding other factors constant, a decrease in the tax for producing coffee cause
ID: 2507523 • Letter: H
Question
Holding other factors constant, a decrease in the tax for producing coffee causes
a. the supply curve to shift to the left, causing the prices of coffee to rise.
b. the supply curve to shift to the right, causing the prices of coffee to rise.
c. the supply curve to shift to the left, causing the prices of coffee to fall.
d. the supply curve to shift to the right, causing the prices of coffee to fall.
What is the effect of a government quota on equilibrium price and quantity?
8. A large number of firms are capable of producing chocolate-covered cockroaches. The linear, upward sloping supply curve starts on the price axis at $6 per box. A few hardy consumers are willing to buy this product and have a linear demand curve that hits the price axis at $4 per box. Is there and equilibrium at a positive price and quantity? Explain.
Explanation / Answer
1. d) the supply curve to shift to the right, causing the prices of coffee to fall.
2. equilibrium qty will fall and eqm price will rise
3.
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