Suppose the government taxes a company that produces plastic water bottles and at the same time consumers become hesitant to use plastic water bottles due to the fear of toxins in the plastic. What would happen in the market to the equilibrium price and quantity of plastic water bottles?
A. Price increases and quantity is indeterminate.
B. Quantity decreases and price is indeterminate.
C. Quantity increases and price is indeterminate.
D. Price decreases and quantity is indeterminate.
Answer: B
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