New tax is placed on the firms selling sugary drinks

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Reference no: EM131094652

Suppose a new tax is placed on the firms selling sugary drinks. What is the likely impact on prices of sugary drinks?

A) An increase in taxes shifts the supply curve to the left and causes a decrease in prices.

B) An increase in taxes shifts the supply curve to the right and causes a decrease in prices.

C) An increase in taxes shifts the supply curve to the right and causes an increase in prices.

D) An increase in taxes shifts the supply curve to the left and causes an increase in prices.

Reference no: EM131094652

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