Relating to the Economics in Practice on page 339: Europe has a carbon tax, and electricity producers are among the largest of the carbon producing firms. The carbon tax increases the costs of the electricity producers, which will shift the ________ curve in the electricity market to the ________.

Question

Quizplus · Accepted Answer

The carbon tax increases the cost of production for electricity producers, so they will supply less electricity at every given price level. This will shift the supply curve to the left.

Relating to the Economics in Practice on Page 339: Europe