Learning Path
Question & Answer
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outward
inward
horizontally
vertically
Understanding the Answer
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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
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Deep Dive: Shifts in Supply Curve
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Definition
Shifts in the supply curve occur when factors other than price influence the quantity of a product supplied at each price level. Changes in production costs, technology, government policies, and expectations can shift the supply curve either outward (increase in supply) or inward (decrease in supply).
Topic Definition
Shifts in the supply curve occur when factors other than price influence the quantity of a product supplied at each price level. Changes in production costs, technology, government policies, and expectations can shift the supply curve either outward (increase in supply) or inward (decrease in supply).
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