If a Pigovian tax is levied on consumers, the demand curve will shift straight _______ and the equilibrium quantity will _______.
A)up; decrease
B)down; decrease
C)down; increase
D)up; increase

Question

Quizplus · Accepted Answer

A Pigovian tax on consumers makes the product more expensive for them, effectively decreasing their demand. This shifts the demand curve down, leading to a decrease in the equilibrium quantity.

If a Pigovian Tax Is Levied on Consumers, the Demand