What is the likely effect on the market for wine of a simultaneous increase in both consumer incomes and producer taxes on wine?

Question

Quizplus · Accepted Answer

The increase in consumer incomes will lead to an increase in demand for wine, which will put upward pressure on both price and quantity. However, the increase in producer taxes will increase the cost of producing wine, which will put upward pressure on price and downward pressure on quantity. The net effect on quantity is indeterminate, but the price will certainly increase.

What Is the Likely Effect on the Market for Wine