Relating to the Economics in Practice on page 340: 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 ________.
A) supply; right
B) supply; left
C) demand; right
D) demand; left

Question

Quizplus · Accepted Answer

The carbon tax increases the production costs for electricity producers, making it more expensive for them to supply electricity. This results in a decrease in the quantity of electricity supplied at any given price, which is represented by a leftward shift of the supply curve.

Relating to the Economics in Practice on Page 340: Europe