Use the figure below to answer the following question(s). Figure 4-9 -Refer to Figure 4-9. The market for gasoline was initially in equilibrium at point b. If a $.40 excise tax was imposed, A) the supply of gasoline would shift to S₂. B) the price of gasoline to consumers would increase from $1.20 per gallon to $1.40 per gallon. C) the net price received by producers of gasoline would decline from $1.20 per gallon to $1.00 per gallon. D) all of the above would occur.

Question

Quizplus · Accepted Answer

The excise tax shifts the supply curve to S2, increases the price to consumers, and decreases the net price to producers.

Use the Figure Below to Answer the Following Question(s)