Answer:
D) demand curve will shift downward by the amount of the tax.
Explanation:
An excise tax is a tax levied on specific goods or services, e.g. gas tax.
This tax will have a similar effect on the quantity demanded as a price increase. But instead of shifting the equilibrium point with the demand curve, it will shift the whole demand curve to the left. This leftward shift will reduce the quantity demanded at every price level, which in turn will lower the equilibrium price.
This tax will hurt both consumers and suppliers since it reduces the number of units sold and it increases the price of the cars.
