The government imposes a unit excise tax on bubble gum. what happens as a result?

Question

Finn Simon

Social Studies

11 November, 16:00

The government imposes a unit excise tax on bubble gum. what happens as a result?

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Answers (2)

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Mckay · Answer 1

At the original market price, there is a bubble gum shortage and so price rises.

when the government excise tax on bubble gum, less producers would see it as a profitable commodity, which lead to the shortage of the product in the market. Since the rarity now increased, more people are willing to pay higher price for the product

Alyson Pollard · Answer 2

The government imposes a unit excise tax on bubble gum. as a result that At the original market price, there is a bubble gum shortage and so price rises. There will be no change in either the market price or equilibrium quantity as long as the excise tax rate is 5 percent or less.