Imposition of an Output Tax on All Firms in a Competitive

question 108

Multiple Choice

Imposition of an output tax on all firms in a competitive industry will result in:

• A) a downward shift in each firm's marginal cost curve.
• B) a downward shift in each firm's average cost curve.
• C) a leftward shift in the market supply curve.
• D) the entry of new firms into the industry.
• E) higher profits for the industry as price rises.

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Definitions:

Equally Attractive

Describes a scenario in which two or more entities are perceived to have the same level of attractiveness by an observer.

Mere Exposure Effect

A psychological occurrence in which people tend to develop a preference for things merely because they are familiar with them.

Novel Stimuli

New or unfamiliar stimuli that have not been encountered before, often drawing attention and eliciting responses from individuals.

Mere Exposure Effect

This phenomenon describes how people tend to develop a preference for things simply because they are familiar with them.