Suppose a Tax of $1 Per Unit Is Imposed on a Good.The

question 13

Multiple Choice

Suppose a tax of $1 per unit is imposed on a good.The more elastic the demand for the good,other things equal,

• A)the larger is the decrease in quantity demanded as a result of the tax.
• B)the smaller is the tax burden on buyers relative to the tax burden on sellers.
• C)the larger is the deadweight loss of the tax.
• D)All of the above are correct.

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Definitions:

Average Variable Cost

The total variable costs of production divided by the number of units produced, representing the variable cost per unit.

Instructional Modules

Structured units of teaching material or academic content designed for educational purposes.

Variable Cost

Costs that change in proportion to the level of production or business activity.

Average Total Cost

The total cost divided by the number of goods produced, representing the cost per unit of output.