In a Competitive Market with a Downward-Sloping Demand Curve, a Tax

question 75

Multiple Choice

In a competitive market with a downward-sloping demand curve, a tax that increases the fixed cost of every firm will:

• A)reduce the number of firms supporting long-run equilibrium.
• B)increase the long-run equilibrium price.
• C)not cause the number of firms supporting long-run equilibrium to change.
• D)answers a and b.
• E)answers b and c.

Identify the consequences of policy and regulation changes on markets.

Predict market outcomes based on simultaneous shifts in supply and demand.

Explain the invisible hand principle and its implications for market efficiency.

Understand the functions of prices in a market system.

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Definitions:

Unconditional Positive Regard

In psychology, an attitude of total acceptance and support towards another person, regardless of what they say or do.

Free Association

A psychoanalytic process in which a patient says whatever comes to mind without self-censorship, revealing unconscious thoughts or feelings.

Psychodynamic Therapy

Treatment for psychological disorders where a therapist works with clients to help them gain insight about how their unconscious processes may be causing inner conflict and impairing daily functioning.

Borderline Personality

A psychological condition marked by erratic emotions, actions, and interpersonal connections.