If a Good Is Produced by an Increasing-Cost Competitive Industry

question 21

Multiple Choice

If a good is produced by an increasing-cost competitive industry and the demand for its product is elastic,the imposition of a per-unit tax on producers will cause price to _____ in the short run.

• A)rise by the amount of the tax
• B)fall by the amount of the tax
• C)rise by less than the amount of the tax
• D)fall by more than the amount of the tax

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Definitions:

Nervous System

The complex network of nerves and cells that transmits signals between different parts of the body, enabling coordination, response to stimuli, and the control of bodily functions.

Astrocyte

A type of star-shaped glial cell in the brain and spinal cord, involved in biochemical support of endothelial cells that form the blood-brain barrier.

Sensory Receptors

Specialized cells or nerve endings that respond to changes in the environment by generating signals that travel to the nervous system.

Action Potentials

Rapid, momentary changes in the electrical potential across a cell membrane, key in the transmission of nerve impulses.