A carbon tax on fossil fuels is likely to cause the price of goods produced by firms that use fossil fuels to
A) decrease.
B) not change.
C) increase.
D) change, but in a way that cannot be determined.

Question

Quizplus · Accepted Answer

A carbon tax on fossil fuels raises the cost of production for firms that rely on these fuels. To offset this added cost, firms are likely to raise prices, leading to an increase in the price of goods produced by these firms.

A Carbon Tax on Fossil Fuels Is Likely to Cause