If a $2 Tax Per Bottle of Wine Is Imposed

question 57

Multiple Choice

If a $2 tax per bottle of wine is imposed on wine producers, which of the following will occur?

• A) The price of wine will increase, fewer bottles will be purchased, and there will be a deadweight loss from this tax.
• B) The price of wine will increase, more bottles will be purchased, and consumers will gain as the result of this tax.
• C) The price of wine will decrease, more bottles will be purchased, and there will be a deadweight loss from this tax.
• D) The price of wine and quantity sold will be unchanged.

---

Definitions:

Quantity Supplied

The total amount of a specific good or service that producers are willing and able to sell at a particular price within a given time frame.

Demand for Calendars

The consumers' desire and willingness to purchase calendars, which can fluctuate based on factors like the time of year and cultural or individual preferences.

Equilibrium Price

The value where the supplied quantity of a product equals the demanded quantity of that product.

Equilibrium Quantity

Supply and demand volume of goods or services at the price where equilibrium is achieved.