Reference no: EM131607050

The supply curve shows the number of cars that firms produce and sell as a function of the price that consumers pay. Show what would happen if Congress voted to impose a tax that car makers pay for each subcompact car sold.

Label the axes using the drop-down menus. Then choose the correct one of the following two options and use it to graph your answer. It is important that you label the line(s) correctly and according to the instructions given in the option you choose. For example, if you choose Option 1, you should use "Supply" to label your supply curve. If you choose Option 2 you should label the initial curve S1 and the shifted curve S2. Any incorrect labelling will result in losing the whole mark. So, double check you labelling before submitting this question. 

Option 1: Place one supply curve on the graph and label appropriately. Place gray drop lines to indicate the initial point along the supply curve, and place black drop lines to indicate the new point.

Option 2: Place two supply curves on the graph, an initial supply curve plus a new curve, illustrating a shifted curve. Label the initial curve S1 and the shifted curve S2. Do not place any dashed drop lines on the graph.