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Suppose There Is Currently a Tax of $100 Per Ticket

Question 300

Multiple Choice

Suppose there is currently a tax of $100 per ticket on airline tickets. Sellers of airline tickets are required to pay the tax to the government. If the tax is reduced from $100 per ticket to $80 per ticket, then the


A) demand curve will shift upward by $20, and the price paid by buyers will decrease by less than $20.
B) demand curve will shift upward by $20, and the price paid by buyers will decrease by $20.
C) supply curve will shift downward by $20, and the effective price received by sellers will increase by less than $20.
D) supply curve will shift downward by $20, and the effective price received by sellers will increase by $20.

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