How does change in per unit tax influence that supply of a good by a f – InterviewSolution

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1.	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.
Answer» 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.

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