Question
of Time left 15 12 01 101 Download the figure. Consider the supply and demand graph above showing a shift in demand from D2 to D1. Which of the following statements are true? (Select all that apply.) a. There is not enough information to determine the elasticity of demand b. The shift from D2 to D1 represents a tax. c. A supply-side tax would have had the same effect on the market. d. The shift from D2 to D1 represents a subsidy. e. Producers will see a larger change in price than consumers. f. Supply is more elastic than demand. g. The amount of the tax/subsidy is $3 h. Supply is inelastic. i. Consumers will see a larger change in price than producers. j. Demand is elastic. 18 100 D2
Answer
ANSWER:
ACCORDING TO THE QUESTION;
In the given graph, it can be seen that demand curve shifts to the right from D1 to D2.
Explanation:Please refer to solution in this step.
Step: 2
According to the given graph, it can be said that:
- This shift could be the cause of subsidy that allows consumers to make more demand.
- Supply side tax would have different impact because it will lead to decrease the demand.
- Supply is relatively inelastic than demand.
- Producer will see larger change in price than the consumers because smaller change in quantity supplied occur due to larger change in price.
- Demand is relatively elastic than supply.
- Among of tax /subsidy is $3 because initial and final price has a gap of $3.
Hence, correct options are: b, d, e, g, and h
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