Suppose That Sellers Require $6

question 168

Multiple Choice

Suppose that sellers require $6.70 per unit to sell 800 units. If a $2 tax per unit is placed on sellers, the sellers will require _______ per unit to sell 800 units, causing the supply curve ________.

• A) $8.70; to shift up by $2.00
• B) $8.70; to shift down by $2.00
• C) $4.70; to shift up by $2.00
• D) $4.70; to shift down by $2.00

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Definitions:

Variable Cost

Expenses that vary directly with the volume of products or services a company generates.

Total Cost

Represents the complete sum of all expenses incurred in the production of goods or services, including both fixed and variable costs.

ATC

Average Total Cost, refers to the total cost per unit of output, calculated by dividing the total cost by the quantity of output produced.

Long Run

A period of time in economics during which all factors of production and costs are variable, allowing for full adjustment to any change.