A tax on a firm typically shifts the cost curve (also known as the supply curve) of the firm inwards.
When a tax is imposed on a firm, the cost of producing each unit of output increases. As a result, the firm's supply curve shifts upwards and leftwards, indicating a decrease in the quantity of output supplied at each price level. This inward shift of the supply curve shows that the firm is less willing and able to produce and supply goods or services at any given price due to the higher costs imposed by the tax.
does a tax on a firm shift the curve inwards or outwards?
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