Which of the following is true about an excise tariff?
A. Foreign firms' average cost curves are shifted down by the amount of the excise tariff.
B. Domestic firms' average cost curves are shifted up by the amount of the excise tariff.
C. Foreign firms' marginal cost curves are shifted up by the amount of the excise tariff.
D. Domestic firms' marginal cost curves are shifted up by the amount of the excise tariff.
Answer: C
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