Tax shifts supply left; income fall boosts demand for inferior good

Steps:

• Tax on fast food increases production costs, shifting supply curve leftward.
• Fast food as inferior good means lower real income increases demand, shifting demand curve rightward.
• Leftward supply shift raises price; rightward demand shift also raises price and increases quantity.
• New equilibrium at higher price intersection; quantity depends on shift magnitudes but typically falls with tax dominance.

Why A is correct:

• A shows higher price and lower quantity, matching tax's supply contraction outweighing demand expansion per supply-demand law.

Why the others are wrong:

• B: Wrong; ignores demand increase from inferior good status.
• C: Wrong; understates price rise by missing combined upward pressure.
• D: Wrong; predicts quantity rise, contradicting tax's restrictive effect.

Final answer: A