All else equal,if the government decides to impose a tax on potato chips,the equilibrium quantity of potato chips would ________ and the equilibrium price of potato chips would ________.

Question

Quizplus · Accepted Answer

The tax on potato chips will increase the cost of production for the producers, leading to a decrease in the supply of potato chips. As a result, the equilibrium quantity of potato chips will decrease. The decrease in supply will also lead to an increase in the equilibrium price of potato chips.

All Else Equal,if the Government Decides to Impose a Tax