13. Which of the following will NOT reduce the actual consumption of premium Ice Cream?
  1. An excise tax of $0.50 on every pint of ice cream. Excise taxes shift back the supply curve, increasing the market price, and reducing consumption. Their effect is similar to an increase in production costs.
  2. Increased consumer fear about the danger of sugar. If consumers believe that sugar is unhealthy or dangerous, demand for products containing large amounts of sugar (such as ice cream) will shift back; leading to a reduction in consumption.
  3. An effective price ceiling of $1.00 imposed by the government. An effective price ceiling below equilibrium will reduce the supply of ice cream legally available on the market. Even though more will be demanded, less will be consumed as ice cream supply drops sharply.
  4. An effective price floor of $5.00 imposed by the government. An effective price floor above the equilibrium price will cause demand for ice cream to drop. Even though there will be an excess of desired supply, consumers won't be willing to buy as much at $5 as they did at the equilibrium price.
  5. An increase in the price of frozen yogurt, (a substitute for ice cream). An increase in the price of a substitute for ice cream, will lead to an increase (shift out) in demand for ice cream. This, in turn, will cause equilibrium price and quantity to rise.

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