A tax on the sellers of coffee will

Question

Quizplus · Accepted Answer

A tax on the sellers of coffee will increase the cost of production for the sellers, decreasing the effective price of coffee they receive. This will lead to a decrease in the supply of coffee because sellers will be reluctant to produce as much at the given price. As a result, this will lead to an increase in the price of coffee paid by buyers, which will reduce the demand for coffee. The net effect of these changes will be a decrease in the equilibrium quantity of coffee.

A Tax on the Sellers of Coffee Will