Imagine the government would like to increase revenues by taxing the people. If they place a unit tax on certain goods, this is equivalent to
A) c and e
B) shifting the demand curve to the right
C) reducing everyone's income by the amount of the unit tax
D) raising the fixed costs of producers
E) shifting the supply curve to the left

Question

Quizplus · Accepted Answer

A unit tax on goods typically increases the cost of production, leading to a decrease in supply, which is represented by a leftward shift of the supply curve.

Imagine the Government Would Like to Increase Revenues by Taxing