Ceteris Paribus, in the Long Run, a Tax Placed on a Perfectly

question 33

Multiple Choice

Ceteris paribus, In the long run, a tax placed on a perfectly competitive industry will

• A)Increase the price of the good by an amount equal to the tax
• B)Increase the price of the good by an amount less than the tax
• C)Be borne entirely by the firm
• D)Be entirely borne by the consumer

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Definitions:

Produced Units

The total number of finished goods produced by a company during a specific period.

Indirect Manufacturing Cost

This refers to costs that are used in the production process but cannot be directly traced to a specific product, including expenses like maintenance, utilities, and management salaries.

Produced Units

The quantity of items manufactured during a specific period, reflecting the output of a production process.

Direct Manufacturing Cost

The sum of all costs directly involved in the production of a product, including direct labor and materials, but excluding indirect expenses.