Suppose the government imposes a tax on electric companies for each unit of sulfur they emit.Which of the following would NOT occur?

Question

Quizplus · Accepted Answer

Imposing a tax on sulfur emissions would increase the cost of production for electric companies. To maintain their profit margins, they would need to increase prices for electricity, not decrease them. The other options are all possible outcomes of such a tax: electric companies would have an incentive to shift to low sulfur oil or alternative energy sources, and a decrease in the amount of electricity produced could occur if it becomes too expensive for companies to continue producing at current levels.

Suppose the Government Imposes a Tax on Electric Companies for Each