In an election debate, two candidates for governor are debating about whether to raise the general sales tax from 5 to 7 percent. Candidate A argues that this would increase tax revenues, enabling the state to maintain essential services. Candidate B argues that the tax would hurt retailers and consumers, slowing down the economy so much that it would decrease tax revenues too. What assumptions must the candidates be making in order to justify their position? O Candidate A assumes that the price effect would be larger than the quantity effect. O Candidate B assumes that the price effect would be larger than the quantity effect. O Candidate A assumes that the quantity effect would be larger than the price effect. O Candidate B assumes that the quantity effect would be exactly the same as the price effect.



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