In economics, what is a tax charged on each unit of a good or service called?

In economics, a tax charged on each unit of a good or service is called a per-unit tax.

A per-unit tax adds a fixed monetary amount to every item sold. A $2 tax on every bottle, ticket, or gallon is therefore the same per-unit amount regardless of the item’s selling price. In a supply-and-demand diagram, it creates a wedge between the price paid by buyers and the price received by sellers.

The tax can be legally collected from buyers or sellers, but the legal assignment does not determine the final economic burden. Tax incidence depends mainly on the relative elasticities of demand and supply. The less responsive side of the market generally bears more of the burden.

An ad valorem tax is different because it is a percentage of value, such as a 10% sales tax. A lump-sum tax is a fixed total payment rather than a charge attached to each unit. These distinctions matter when predicting quantities, prices, and government revenue.