Question -
Answer -
(i) A unit tax is a tax that the government imposes per unit sale of output.
(ii) For example, suppose that the unit tax imposed by the government is Rs┬а 3.
Then, if the firm produces and sells 20 units of the goods, the total tax that the firm must pay to the government is 20 x┬а 3 = 60.
(iii) So, if the unit tax increases, the firmтАЩs cost of production increases which will shift the supply curve leftward.
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