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How does an increase in an excise tax on cars affect the supply of cars?

AMore cars will be made.
BFewer cars will be made.
CSupply will stay the same.
DSupply will increase. Reset Selection

Verified Answer :

The correct answer is letter B. Fewer cars will be made. The increase in an excise tax on cars affect the supply of car by having "fewer cars will be made." Because of the increase of tax, it will also manifest an increase in amount of production and increase in selling price.

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