PRC-3 · Chapter 10 · Question 15 of 70
Two goods, Alpha and Beta, are substitutes. If the government places a heavy tax on the production of Alpha, causing its price to rise significantly, what will happen in the market for Beta?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) The demand for Beta will shift to the right
Explanation
If Alpha becomes more expensive, consumers will switch to its substitute, Beta, causing the demand curve for Beta to shift to the right.
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