How does change in per unit tax influence that supply of a good by a firm ? Explain. Or How does subsidy infuence the supply of a good by a firm ? Exp

Question

How does change in per unit tax influence that supply of a good by a firm ? Explain. Or How does subsidy infuence the supply of a good by a firm ? Exp

How does change in per unit tax influence that supply of a good by a firm ? Explain.
Or
How does subsidy infuence the supply of a good by a firm ? Explain.

Monjur Alahi

4 views

2025-01-04 04:42

1 Answers

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Salim Ahmed Kawsar · Accepted Answer · 2023-02-05T15:29:48+06:00

Change in per unit tax raises cost of producing the good. Price remaining unchanged Profits decline. This is his disincentive to producers who supply less. A subsidy will shift the supply curve to the right and therefore lower the equilibrium price in a market. ... The amount of the subsidy is shown by the gap between the supply curves.