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Let D = Demand, S = Supply, P = Equilibrium

Question 50

Multiple Choice

Let D = demand, S = supply, P = equilibrium price, Q = equilibrium quantity. If the government taxes the activity of logging tropical forests, what happens in the market for tropical hardwood?


A) D decreases, S no change, P and Q decrease.
B) D no change, S decreases, P increases, Q decreases.
C) D and S decrease, P and Q increase.
D) D no change, S decreases, P increases, Q increases.

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