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Suppose the Tax on Gasoline Is Raised from $0

Question 226

Multiple Choice

Suppose the tax on gasoline is raised from $0.50 per gallon to $2.50 per gallon.As a result,


A) tax revenue necessarily increases.
B) the deadweight loss of the tax necessarily increases.
C) the demand curve for gasoline necessarily becomes steeper.
D) All of the above are correct.

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