An emission fee levied against polluting firms will tend to shift the:

Name: An emission fee levied against polluting firms will tend to shift the:
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Question

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An emission fee is a cost imposed on polluting firms for the negative externality they produce. This cost increases the firms' production costs, thereby reducing their profitability. As a result, firms are likely to decrease their supply of the product as they attempt to minimize their costs. Hence, the supply curve of the firms will shift to the left.

An Emission Fee Levied Against Polluting Firms Will Tend to Shift