Imposing a unit excise tax on the final sale of a good or service can be displayed graphically as

Question

Quizplus · Accepted Answer

Imposing a unit excise tax on the final sale of a good or service increases the cost of production, so the supply curve shifts upwards vertically by the amount of the tax. This results in an increase in the price paid by consumers and a decrease in the quantity consumed. The demand curve remains unchanged.

Imposing a Unit Excise Tax on the Final Sale of a Good