Use the Figure Below to Answer the Following Questions

question 117

Multiple Choice

Use the figure below to answer the following questions. Figure 6.3.3
-Refer to Figure 6.3.3.Suppose a tax of $1 is imposed.In which market would the seller pay the highest portion of the tax?

• A)(a)
• B)(b)
• C)(c)
• D)(d)
• E)all markets equally

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Definitions:

Monopolistic Competitor

In market economics, a monopolistic competitor refers to a company operating in a sector filled with competitors, yet it has enough differentiation to have some control over its pricing.

Downward Sloping

A description of a curve or line that shows a decrease in one variable as another variable increases, commonly seen in demand curves.

Demand Curves

Graphical representations showing the relationship between the price of a good and the quantity demanded by consumers.

Perfect Competition

Perfect Competition is a market structure characterized by a large number of small firms, identical products sold by all firms, no barriers to enter or exit the market, and perfect knowledge of prices and technology.