An increase in a excise tax imposed on wine producers is likely to result in

Question

BlackTom AI · Accepted Answer

An excise tax increases producers' per-unit cost, so the supply curve shifts left (or upward) while demand remains unchanged.

1. Relevant concepts
- Supply and demand: equilibrium price and quantity are determined where supply = demand.
- Taxes on producers raise marginal cost, shifting the supply curve (not the demand curve).
- A change in supply shifts the whole supply curve; a change in quantity demanded is a movement along the demand curve (contraction if quantity falls).

2. Step-by-step reasoning
- An excise tax raises the cost of producing each unit. For every given market price, producers supply fewer units, which is represented graphically by a leftward (or upward) shift of the supply curve.
- Because the demand curve does not change (consumers’ preferences and incomes are unchanged by the producer tax), the new intersection of supply and demand occurs at a higher market price and a lower quantity.
- The lower equilibrium quantity represents a contraction (movement upward along) the demand curve, not a shift of demand.

3. Calculation example (intermediate steps)
- Let demand: P = 10 − Q. Initial supply: P = 2 + Q.
- Initial equilibrium: 2 + Q = 10 − Q → 2Q = 8 → Q = 4, P = 6.
- Impose excise tax t = 2 on producers. Producers’ supply becomes P − t = 2 + Q → P = 2 + Q + 2 = 4 + Q.
- New equilibrium: 4 + Q = 10 − Q → 2Q = 6 → Q = 3, P = 7.
- Result: price rises from 6 to 7, quantity falls from 4 to 3 → supply shifted left, demand shows a contraction (movement along the curve).

4. Why the correct answer is correct
- The tax affects producers’ costs directly, shifting supply left. The reduction in quantity is shown as a movement along the unchanged demand curve (contraction), exactly matching option b.

5. Why other options are incorrect
- a: Incorrect because the demand curve does not shift left; the supply curve shifts.
- c: Incorrect because an excise tax does not shift supply right or cause expansion of demand.
- d: Incorrect because the tax does not shift demand right nor cause an expansion along supply.

6. Conclusion
- The correct choice is b. a shift in the supply curve to the left and a contraction along the demand curve.

An increase in a excise tax imposed on wine producers is likely to result in单项选择题

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