Suppose the United States chose to legalize the production and use of marijuana but also decided to put a tax on the good (with the tax paid by producers) . After doing so, suppose that the price that consumers paid rose and the amount that growers got to keep fell. This would
A) indicate that the demand-side effect was greater than the supply-side effect.
B) be shockingly counter-intuitive because there would be no supply-and-demand model that could explain it.
C) indicate that the demand-side effect was smaller than the net supply-side effect.
D) suggest that the supply curve is vertical.
Correct Answer:
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