Other things equal,an excise tax on a product will:

A) increase its supply.
B) increase its price.
C) increase the quantity sold.
D) increase its demand.

Question

Other things equal,an excise tax on a product will:A)  increase its supply.B)  increase its price.C)  increase the quantity sold.D)  increase its demand.

Madison Aubert · Accepted Answer

Final Answer : B, Explanation :  An excise tax on a product will increase the cost of producing that product, which will in turn increase the price that consumers pay for it. This is because producers will pass on the cost of the tax to consumers in the form of higher prices. The other choices are incorrect because an excise tax will likely decrease the supply of the product (as producers may be less willing to produce it due to the higher cost of production), decrease the quantity sold (as consumers may be less willing to buy it due to the higher price), and have no effect on demand, which is determined by factors other than price, such as consumer preferences and income.

Other things equal,an excise tax on a product will:

A) increase its supply.
B) increase its price.
C) increase the quantity sold.
D) increase its demand.

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