If there was an increase in the excise tax imposed on beer suppliers, what would be the effect on the equilibrium price and quantity of beer?
A) price increases; quantity decreases
B) price decreases; quantity decreases
C) price increases; quantity increases
D) price decreases; quantity increases

Question

Quizplus · Accepted Answer

An increase in excise tax on beer suppliers would increase the cost of production for beer, leading to a decrease in supply. As a result, the equilibrium price of beer would increase while the equilibrium quantity of beer would decrease.

If There Was an Increase in the Excise Tax Imposed