If a $2 Tax Per Bottle of Wine Is Imposed

Multiple Choice

If a $2 tax per bottle of wine is imposed on wine producers, which of the following will occur?

A) The price of wine will increase, fewer bottles will be purchased, and there will be a deadweight loss from this tax.
B) The price of wine will increase, more bottles will be purchased, and consumers will gain as the result of this tax.
C) The price of wine will decrease, more bottles will be purchased, and there will be a deadweight loss from this tax.
D) The price of wine and quantity sold will be unchanged.