Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
outward
B
inward
C
horizontally
D
vertically
Understanding the Answer
Let's break down why this is correct
Answer
When a government tax is added to a product, producers have to pay more for each unit they make, so they are less willing to supply the same amount. This extra cost pushes the supply curve to the left, meaning the same price now brings a smaller quantity to the market. The leftward shift shows that at every price, the quantity supplied drops because the tax raises production costs. For example, if a factory that made 100 units before the tax can only produce 80 units after paying the tax, the supply curve has moved leftward. This shift reflects the higher cost of production caused by the tax.
Detailed Explanation
A tax raises the cost of making the product. Other options are incorrect because Some think a tax makes producers want to sell more, but it actually makes them less willing to supply; A horizontal shift would mean the same quantity is sold at a different price, which is not how taxes affect supply.
Key Concepts
Shifts in Supply Curve
Production Costs
Government Policies
Topic
Shifts in Supply Curve
Difficulty
hard level question
Cognitive Level
understand
Practice Similar Questions
Test your understanding with related questions
1
Question 1Which of the following factors can cause a shift in the supply curve for a product? Select all that apply.
easyEconomics
Practice
2
Question 2Arrange the following factors that can cause a rightward shift in the supply curve in the correct order: A) Decrease in production costs, B) Introduction of new technology, C) Government subsidies, D) Increase in producer expectations.
easyEconomics
Practice
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