Refer to the accompanying graph.If a tax is placed on a good and all else is held constant,we would assume that the supply curve would

Question

Quizplus · Accepted Answer

When a tax is placed on a good, the cost of production for the supplier increases, thus reducing the quantity supplied at every price level. This results in a leftward shift of the supply curve. Therefore, the supply curve would shift from S₁ to S₂.

Refer to the Accompanying Graph