Question
A government official proposes taxing grocery stores at 50 cents per plastic bag. What effect would the tax have on the market for plastic grocery bags?
A. Demand would decrease
B. Supply would decrease
C. Demand would increase
D. Supply would increase
A. Demand would decrease
B. Supply would decrease
C. Demand would increase
D. Supply would increase
Answers
GPT-4o mini
The correct answer is **B. Supply would decrease**.
Imposing a tax on plastic grocery bags would increase the cost of supplying these bags for grocery stores. As a result, some stores may provide fewer plastic bags or try to pass the increased cost onto consumers. This would effectively decrease the supply of plastic grocery bags available in the market.
Imposing a tax on plastic grocery bags would increase the cost of supplying these bags for grocery stores. As a result, some stores may provide fewer plastic bags or try to pass the increased cost onto consumers. This would effectively decrease the supply of plastic grocery bags available in the market.