Suppose there is currently a tax of $50 per ticket on airline tickets. Buyers of airline tickets
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Question:
Suppose there is currently a tax of $50 per ticket on airline tickets. Buyers of airline tickets are required to pay the tax to the government. If the tax is reduced from $50 per ticket to $30 per ticket, then the
a. demand curve will shift upward by $20, and the effective price received by sellers will increase by $20.
b. demand curve will shift upward by $20, and the effective price received by sellers will increase by less than $20.
c. supply curve will shift downward by $20, and the price paid by buyers will decrease by $20.
d. supply curve will shift downward by $20, and the price paid by buyers will decrease by less than $20.
Related Book For
Foundations of Financial Management
ISBN: 978-1259194078
15th edition
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen
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