Holding other factors constant,a decrease in the tax for producing cars causes

Question

Quizplus · Accepted Answer

A decrease in taxes for producing cars would lead to a decrease in production costs, therefore incentivizing more producers to supply cars. This shift in supply curve to the right would result in a decrease in car prices. However, this decrease in production cost for cars would not have any direct impact on the prices of coffee. Therefore, the supply curve for coffee would remain unaffected and prices would not change due to the tax cut for cars.

Holding Other Factors Constant,a Decrease in the Tax for Producing