A tax on sellers of popcorn will:
A) increase the size of the popcorn market.
B) reduce the size of the popcorn market.
C) may increase, decrease, or have no effect on the size of the popcorn market.
D) have no effect on the size of the popcorn market.

Question

Quizplus · Accepted Answer

A tax on sellers increases the cost of producing and selling popcorn, which will lead to a decrease in the supply of popcorn. As a result, the equilibrium price will increase, and the quantity demanded will reduce, leading to a smaller popcorn market. Thus, the tax on sellers of popcorn will reduce the size of the popcorn market.

A Tax on Sellers of Popcorn Will