If the government imposes a per-unit tax on sales of an industry's product, then we would expect

Name: If the government imposes a per-unit tax on sales of an industry's product, then we would expect
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Question

Quizplus · Accepted Answer

A per-unit tax on sales of an industry's product increases the cost of production for firms in that industry. This results in a decrease in supply, which is reflected by a leftward shift of the supply curve. The demand curve is not impacted by the tax, hence it does not shift.

If the Government Imposes a Per-Unit Tax on Sales of an Industry's