Suppose a $2 tax is placed on the sellers of BBQ propane.How will the supply curve shift
A)right (downward) by exactly $2
B)left (upward) by less than $2
C)left (upward) by exactly $2
D)right (downward) by less than $2

Question

Quizplus · Accepted Answer

When a tax is placed on sellers, they have to pay an additional cost to the government, which reduces their profits. As a result, the supply curve shifts to the left (upward) by the amount of the tax. In this case, the tax is $2, so the supply curve will shift leftward by exactly $2. Therefore, the correct choice is C.

Suppose a $2 Tax Is Placed on the Sellers of BBQ