In a Market with a Downward-Sloping Demand Curve and an Upward-Sloping

Multiple Choice

In a market with a downward-sloping demand curve and an upward-sloping supply curve, a law requiring sellers to pay the government a tax of $1.00 per pack on cigarettes has the effect of:

A) shifting the supply curve to the right and increasing the price buyers pay by $1.00.
B) shifting the demand curve to the right and increasing the price buyers pay by $1.00.
C) shifting the supply curve to the left and increasing the price buyers pay by less than $1.00.
D) shifting the demand curve to the left and increasing the price buyers pay by less than $1.00.