Question

How does the imposition of GST affect the supply curve of a firm?

Answer 1

1:Imposition of GST shifts the marginal cost curve of the firm upward. Accordingly, the supply curve shifts to the left implying that less would be supplied at the same price.
2:A unit taxis the tax imposed on per unit of the output sold. Due to the imposition of a unit tax, the cost of production per unit of output increases, which ultimately increases the marginal cost.