This graph depicts a tax being imposed,causing demand to shift from D₁ to D₂.According to the graph shown,the tax caused:

Question

Quizplus · Accepted Answer

The tax causes an increase in price (from P1 to P2), resulting in a decrease in quantity demanded (from Q1 to Q2). The area between the two demand curves (between Q1 and Q2, and between P1 and P2) represents the tax revenue collected by the government. Meanwhile, the decrease in quantity demanded represents a decrease in consumption, as consumers are less willing to pay the higher price. Therefore, the correct answer is A: positive government revenue and decreased consumption.

This Graph Depicts a Tax Being Imposed,causing Demand to Shift