Suppose the government were to impose a $3 tax on high-speed Internet connections.The law states that $2/connection is to be paid to the government by the producer,and the remaining $1 to be paid by the consumer.Which statement regarding the tax is TRUE?

Question

Quizplus · Accepted Answer

The tax increases the producer's cost of production by $2/connection, which would lead to a decrease in supply. This means the supply curve for high-speed Internet connections will shift to the left. The $1 tax on the consumer does not directly affect the supply curve, but it may slightly reduce demand, which would also contribute to a leftward shift in the supply curve. Therefore, choice A is the correct answer.

Suppose the Government Were to Impose a $3 Tax on High-Speed