If a Tax Is Placed on Perfectly Competitive Firms That

question 167

Multiple Choice

If a tax is placed on perfectly competitive firms that impose external costs on society, the firm's ________ curve will shift up and the industry ________ curve will shift to the left.

• A) marginal cost; demand
• B) marginal benefit; demand
• C) marginal benefit; supply
• D) marginal cost; supply

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Definitions:

Industrial Market

The market for goods and services traded among businesses and institutions, rather than between businesses and private consumers.

Fisheries

Industry or activity concerned with catching, processing, or selling fish, shellfish, and sometimes whales.

State Governments

The government entities that have jurisdiction over particular states or provinces within a federal system, responsible for local legislation and governance.

Organizational Buyers

Those manufacturers, wholesalers, retailers, service companies, nonprofit organizations, and government agencies that buy products and services for their own use or for resale.