Question
Suppose that demand changes, and the (inverse) demand curve moves P = 82 -1Q to P = 90.2 -1Q. This change could be explained by
Suppose that demand changes, and the (inverse) demand curve moves P = 82 -1Q to P = 90.2 -1Q. This change could be explained by
the introduction of an indirect tax on good X, such as a sales tax.
an increase in the price of an input used to produce good X.
an increase in the incomes of consumers.
a change in the tastes of consumers, reflecting that they now prefer good X less.
PART TWO:
Suppose that demand changes, and the (inverse) demand curve moves P = 82 -0.5Q to P = 73.8 -0.5Q. This change could be explained by
an increase in the price of an input used to produce good X.
the introduction of an indirect tax on good X, such as a sales tax.
an increase in the incomes of consumers.
a change in the tastes of consumers, reflecting that they now prefer good X less.
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