When the government of Commerce City imposes a tax on sports cars, it increases the cost of selling those vehicles for producers. This typically leads to a decrease in supply because producers will supply less at every price level due to the additional cost imposed by the tax.
As a result, the supply curve for sports cars will shift to the left. This leftward shift in supply, combined with the existing demand for sports cars, will lead to higher prices for consumers. Therefore, the likely outcome of this tax is:
Supply will shift left, leading to higher prices.
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