A Specific Tax of $1 Per Unit of Output Will

question 121

Multiple Choice

A specific tax of $1 per unit of output will affect a firm's

• A) average total cost, average variable cost, average fixed cost, and marginal cost.
• B) average total cost, average variable cost, and average fixed cost.
• C) average total cost, average variable cost, and marginal cost.
• D) marginal cost only.

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Definitions:

Retailers

Businesses that sell goods or services directly to consumers.

FOB Shipping Point

A term used in shipping indicating that the buyer assumes ownership and the risk of loss of goods once the seller ships the product.

FOB Destination

A shipping term indicating that the seller is responsible for the goods and the shipping cost until the items reach the buyer's specified location.

Net Sales

Total sales revenue after deducting returns, allowances for damaged or missing goods, and discounts.