A tax on beer will increase the cost of production for the manufacturers, which will shift the supply curve to the left. As a result, the equilibrium price will increase and the equilibrium quantity will decrease. Therefore, choice A is the correct answer.

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A Tax on Beer Will

Question 32

Multiple Choice

A tax on beer will

A) raise the equilibrium price and lower the equilibrium quantity.
B) lower the equilibrium price and lower the equilibrium quantity.
C) raise the equilibrium price and raise the equilibrium quantity.
D) lower the equilibrium price and raise the equilibrium quantity.

Correct Answer: