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प्रश्न
How does change in per unit tax influence the supply of a good by a firm? Explain.
उत्तर
Changes in Tax
When there is a rise in taxes, there will be an increase in the cost of production which results in a decline in the profit margin and the supply of the good. The supply curve S shifts leftwards from S to S1. It leads to a fall in the supply of good from OQ0 to OQ1, where the price remains constant at OP.
When there is a decrease in taxes, there will be a decrease in the cost of production which results in a rise in the profit margin and the supply of a good. The supply curve S shifts leftwards from S to S2. It leads to an increase in the supply of good from OQ0 to OQ3 where the price remains constant at OP.
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संबंधित प्रश्न
If price falls, the supply curve will shift to the left.
Explain the distinction between “change in quantity supplied’ and “change in supply”. Use diagram.
When does 'decrease' in supply take place?
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Explain the increase in supply and decrease in supply.
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The relationship between price and supply is positive.
Answer the following questions in detail.
What is meant by Supply? State its determinants.
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The supply curve slopes downward from left to right.
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Stock is the source of supply.
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Supply for perishable goods is inelastic.
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Supply is directly related to price.
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The supply of agricultural commodity is relatively inelastic.
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Market supply schedule.
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Labour supply curve.
State with reason whether you 'agree' or 'disagree' with the following statement.
Supply depends on several factors.
