A government-imposed tax on soft drinks would shift the ________ curve for soft drinks to the ________,increasing the equilibrium price and decreasing the equilibrium quantity.
A) demand; right
B) demand; left
C) supply; right
D) supply; left

Question

Quizplus · Accepted Answer

A government tax on soft drinks would increase the cost of production for the firms that manufacture and supply the soft drinks, and hence shift the supply curve for soft drinks to the left. The leftward shift in the supply curve would cause an increase in the equilibrium price and decrease in the equilibrium quantity of soft drinks. Therefore, the correct answer is D, supply; left.

A Government-Imposed Tax on Soft Drinks Would Shift the ________