-How will the imposition of a sales tax shift the supply curve?
A)The supply curve will shift to the left.
B)The supply curve will shift to the right.
C)The supply curve might shift to the right or to the left depending on whether the tax was a flat rate tax or a percentage tax.
D)Imposing a sales tax will have no effect on the supply curve.

Question

-How will the imposition of a sales tax shift the supply curve?
A)The supply curve will shift to the left. 
B)The supply curve will shift to the right. 
C)The supply curve might shift to the right or to the left depending on whether the tax was a flat rate tax or a percentage tax. 
D)Imposing a sales tax will have no effect on the supply curve.

Quizplus · Accepted Answer

The imposition of a sales tax increases the cost of producing or selling a product, effectively reducing the quantity supplied at any given price. This is represented by a leftward shift in the supply curve.

-How Will the Imposition of a Sales Tax Shift the Supply