If the supply of a product is upsloping and demand is downsloping, an excise tax of $2 per unit will increase price by

Question

Quizplus · Accepted Answer

An excise tax increases the cost of producing or selling a product, shifting the supply curve to the left. This typically results in a higher equilibrium price and lower equilibrium quantity, meaning the price increase is less than the tax amount and output is reduced.

If the Supply of a Product Is Upsloping and Demand