Chapter 3, Problem 2CTQ

To determine

The shift in the supply curve due to the imposition of a tax of 0.75 euro per kilogram of ice-cream sold.

Concept Introduction:

Supply curve- The supply curve abides by the law of supply establishing a direct relationship between the price and the quantity supplied assuming ceteris paribus. If however, factors other than price change due to changes in ceteris paribus conditions, like technology, labor productivity, taxes etc, the supply curve shifts inward or outward.