Suppose a $1 Tax Is Levied on Each Unit of Output

question 44

Multiple Choice

Suppose a $1 tax is levied on each unit of output in a perfectly competitive industry, we know that:

• A)the number of firms in the industry will increase in the long run as long as the demand curve is downward sloping.
• B)the number of firms in the industry will decrease in the long run as long as the demand curve is downward sloping.
• C)firms will no longer produce at the bottom of the average cost curve in long run equilibrium.
• D)firms will no longer produce at the top of the average cost curve in long run equilibrium.

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Definitions:

Mediator Role

The function of acting as an intermediary or neutral party to help resolve conflicts or disputes between two or more parties.

Disagreement

A situation in which two or more parties have differing opinions, beliefs, or perceptions about a certain topic or decision.

Task Groups

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