Economy, asked by amitrath1701, 1 year ago

How does increase in tax affect the price of a commodity?

Answers

Answered by anuththarabashini52
1

Answer:

Explanation:

As sales tax causes the supply curve to shift inward, it has a secondary effect on the equilibrium price for a product. Equilibrium price is the price at which the producer's supply matches consumer demand at a stable price. Since sales tax increases the price of goods, it causes the equilibrium price to fall.

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