An unintended effect of a new tax placed on the producers of good A may likely include

Question

Quizplus · Accepted Answer

The new tax on the producers of good A will increase their costs of production, leading to lower profits. To compensate for the higher production costs, producers may reduce their output or lay off workers, leading to fewer workers employed. This may also result in a higher price for consumers as the supply of good A decreases. Consumers may also experience a decrease in their welfare due to a possible decrease in the quality of good A. However, there is no guarantee for any specific effect on consumers' surplus or producers' surplus.

An Unintended Effect of a New Tax Placed on the Producers