The Government Reduces the Excise Tax on the Sellers in a Competitive

Multiple Choice

The government reduces the excise tax on the sellers in a competitive industry by $10 per unit sold.Both supply and demand curves have some elasticity with respect to price.This reduction in tax means that:

A) supply curve shifts down by $10, but (unless demand is perfectly elastic) price remain constant.
B) supply curve shifts down by less than $10, but (unless demand is highly inelastic) price falls by more than $10.
C) supply curve shifts down by less than $10, but (unless demand is highly elastic) price falls by $10.
D) supply curve shifts down by $10, but (unless supply is perfectly elastic) any price decline is less than $10.
E) demand curve shift down by $10 and price falls by $10.