Consider the graph shown. What would most likely be the cause of a shift from D1 to D2?

Question

Quizplus · Accepted Answer

A tax on buyers would increase the price that buyers pay, causing a decrease in demand (shift from D1 to D2). This is because buyers would be less willing and/or able to buy the same quantity at the higher price. A tax on sellers, on the other hand, would increase the cost of production and decrease supply (shift from S1 to S2). A subsidy for sellers would decrease the cost of production and increase supply (shift from S1 to S3). A subsidy for buyers would increase the purchasing power of buyers and increase demand (shift from D1 to D3).

Consider the Graph Shown