The government levies a specific indirect tax of $1 on every unit of a good sold. In what way does the tax’s introduction shift the good’s demand or supply curve?
- AThe demand curve of the good will shift vertically downwards by $1.
- BThe demand curve of the good will shift vertically upwards by $1.
- CThe supply curve of the good will shift vertically downwards by $1.
- DThe supply curve of the good will shift vertically upwards by $1.