A long hot summer has increased the demand for beer; at the same time a tax is placed on alcohol. What can we say about the equilibrium price and quantity of alcohol?
A. Equilibrium price rises; equilibrium quantity rises.
B. Equilibrium price falls; equilibrium quantity is unknown.
C. Equilibrium price rises; equilibrium quantity is unknown.
D. Equilibrium price rises; equilibrium quantity falls.
Answer: C
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