When the government places a tax on a good and all else is held constant,which of the following would most likely happen?
A) The overall consumption of the good decreases, assuming the good does not have a vertical demand curve.
B) The price the buyer pays for the good decreases, assuming the good does not have a horizontal demand curve.
C) The supply curve shifts to the right.
D) The government receives no tax revenue if the tax is more than 20%.
E) The price and quantity adjust back to the competitive market equilibrium point.
Correct Answer:
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