A government official proposes taxing producers of plastic grocery bags at 10 cents per plastic bag. What effect would the tax have on the market for grocery bags?(1 point)

Question

A government official proposes taxing producers of plastic grocery bags at 10 cents per plastic bag. What effect would the tax have on the market for grocery bags?(1 point)
Responses

Supply would decrease.
Supply would decrease.

Supply would increase.
Supply would increase.

Demand would increase.
Demand would increase.

Demand would decrease.

GPT-4o mini · Answer

The correct response is: **Supply would decrease.** When a tax is imposed on producers, it effectively increases their production costs. This leads to a decrease in the supply of plastic grocery bags, as producers may produce less at any given price due to the higher cost associated with the tax.