Post Utme Pan Atlantic University 2017 Economics Question 6

Practice objective / multiple choice question 6 from the 2017 Post Utme Pan Atlantic University Economics examination.

Post Utme Pan Atlantic University 2017 Economics Objective / Multiple Choice
Question 6 POST_UTME_PAN-ATLANTIC_UNIVERSITY • 2017 • ECONOMICS • objective
Post Utme Pan Atlantic University 2017 Economics Question 6 diagram

In a perfectly competitive market, the equilibrium price and quantity are determined by the intersection of the market demand and supply curves. However, if the government imposes a tax on the producers, the supply curve shifts to the left. What is the effect of this tax on the equilibrium price and quantity?

Answer Options

Correct Answer A. The equilibrium price increases, and the equilibrium quantity decreases.
B. The equilibrium price decreases, and the equilibrium quantity increases.
C. The equilibrium price remains the same, and the equilibrium quantity decreases.
D. The equilibrium price increases, and the equilibrium quantity remains the same.
Correct Answer
A
Correct Option:
The equilibrium price increases, and the equilibrium quantity decreases.

About This Question

This is Post Utme Pan Atlantic University 2017 Economics Question 6. It is one of the objective questions from the 2017 Post Utme Pan Atlantic University Economics examination.

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