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Suppose There Is Currently a Tax of $50 Per Ticket

Question 147

Multiple Choice

Suppose there is currently a tax of $50 per ticket on airline tickets.Buyers of airline tickets are required to pay the tax to the government.If the tax is reduced from $50 per ticket to $30 per ticket,then the


A) demand curve will shift upward by $20,and the effective price received by sellers will increase by $20.
B) demand curve will shift upward by $20,and the effective price received by sellers will increase by less than $20.
C) supply curve will shift downward by $20,and the price paid by buyers will decrease by $20.
D) supply curve will shift downward by $20,and the price paid by buyers will decrease by less than $20.

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