The government imposes a $2.50 per-unit tax on the production of good x. as a result the

Question

Business

Reyna

29 December, 17:44

The government imposes a $2.50 per-unit tax on the production of good x. as a result the

+2

Answers (1)

Know the Answer?

Yadira Rose · Answer 1

Two events will occur. First, the quantity supplied of the good will decrease as there is less revenue to spend on the overall creation of good "x". Second, there will be a rise in the price of good "x" when it is sold to the consumer as a way of offsetting these taxes and other costs.