How Does the Imposition of an Excise Tax on a Good

Multiple Choice

How does the imposition of an excise tax on a good affect its market equilibrium?

A) Equilibrium quantity decreases, and equilibrium price decreases.
B) Equilibrium quantity decreases, and equilibrium price increases.
C) Equilibrium quantity increases, and equilibrium price decreases.
D) Equilibrium quantity increases, and equilibrium price increases.