A tax on the emission of a pollutant from the firms of a competitive industry can be expected to cause the equilibrium quantity demanded and supplied to decline.

Name: A tax on the emission of a pollutant from the firms of a competitive industry can be expected to cause the equilibrium quantity demanded and supplied to decline.
Brand: Quizplus
Rating: 4.8 (23 reviews)

Question

Quizplus · Accepted Answer

A tax on emissions increases the cost of production for firms, causing a decrease in supply. This leads to a decrease in quantity demanded and supplied in the market.

A Tax on the Emission of a Pollutant from the Firms