The government imposes a tax on each plastic bag sold such that the producer of the plastic bags must pay the tax to the government.In the market for plastic bags,the

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Quizplus · Accepted Answer

By imposing a tax on producers of plastic bags, it increases their cost of production, thereby reducing their incentive to produce as much. This will cause a shift in the supply curve to the left, resulting in a higher equilibrium price for plastic bags and a lower equilibrium quantity. The demand curve will not shift as consumers will still require plastic bags for their daily needs.

The Government Imposes a Tax on Each Plastic Bag Sold