Economics (AS & A Level) · Oct / Nov 2025 · Paper 31 · Question 8
9708Methods and effects of government intervention in markets
The diagrams show the demand curve, D1, and the supply curve, S1, for a good that has a sales tax of 10% applied to the final selling price. Which diagram shows the impact of a reduction in the rate of sales tax to 5%?
- ADiagram A
- BDiagram B
- CDiagram C
- DDiagram D
As printed in the paper
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Correct answer: D. Diagram D
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