The imposition of a tax on a product

Question

Quizplus · Accepted Answer

The imposition of a tax on a product increases the production cost for producers, thereby reducing their profitability. This may lead to a decrease in the supply of the product, resulting in a leftward shift in the supply curve. This reduction in supply may also lead to an increase in the price of the product. Therefore, the correct choice is D, which states that the imposition of a tax on a product shifts the supply curve to the left.

The Imposition of a Tax on a Product