'Coal mining companies anticipate an additional tax.' This statement indicates that the:

Question

Quizplus · Accepted Answer

When coal mining companies anticipate an additional tax, it means they foresee an increase in their production costs. As a result, they will decrease their supply of coal, leading to a decrease in the quantity of coal available at any given price. This is reflected by a leftward shift in the supply curve, which results in a higher equilibrium price and a lower equilibrium quantity. Therefore, the correct option is B.

'Coal Mining Companies Anticipate an Additional Tax