When Government Imposes a Per-Unit Tax on a Product, the Net

question 117

Multiple Choice

When government imposes a per-unit tax on a product, the net price producers actually receive for the product (after taxation) typically:

• A) increases by the amount of the per-unit tax.
• B) increases by less than the amount of the per-unit tax.
• C) decreases by the amount of the per-unit tax.
• D) decreases by less than the amount of the per-unit tax.

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Definitions:

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