If a tax is imposed per unit of a good sold,________.

Question

Quizplus · Accepted Answer

When a tax is imposed per unit of a good sold, the cost of production increases for the supplier, which decreases their incentive to produce and supply the good. As a result, the supply curve for the good shifts to the left. This means that the quantity supplied at every price level decreases, leading to a higher equilibrium price and a lower equilibrium quantity. The demand curve remains unaffected by the tax.

If a Tax Is Imposed Per Unit of a Good