Refer to the accompanying graph.If a tax is placed on a good and all else is held constant,we would assume that the supply curve would:

Question

Quizplus · Accepted Answer

When a tax is imposed on a good, the cost of production increases for the supplier, thus reducing the profitability of producing the good. As a result, the supply curve shifts to the left. In this graph, the supply curve shifts from S₁ to S₂, indicating a decrease in the quantity of the good supplied at any given price level. Therefore, the correct choice is C.

Refer to the Accompanying Graph