The imposition of an ad valorem tax: a. shifts the demand curve up by the amount...

Question

Question

The imposition of an ad valorem tax:

a. shifts the demand curve up by the amount of the tax.

b. None of the options.

c. rotates the demand curve in a counter-clockwise direction.

d. rotates the demand curve in a clockwise direction.

e. shifts the demand curve up by the amount of the tax.

Answer 1

Answer #1

The correct option is e.) shifts the supply curve up by the amount of the tax.

Note: There is a misprint. Option a and e are same.

The imposition of an ad valorem tax shifts the supply curve up by the amount of the tax.

Answer 2

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