How does the imposition of an excise tax on a good affect its market equilibrium?
A. Equilibrium quantity increases, and equilibrium price decreases.
B. Equilibrium quantity decreases, and equilibrium price increases.
C. Equilibrium quantity decreases, and equilibrium price decreases.
D. Equilibrium quantity increases, and equilibrium price increases.
Answer: B
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As the price of a product falls, the demand for the product increases, ceteris paribus
Indicate whether the statement is true or false
Average variable cost is at a minimum at the same amount of output at which
A) average product is at a maximum. B) marginal product is at a maximum. C) average product is at a minimum. D) marginal product is at a minimum.
A market situation in which a large number of firms produce similar but not identical products is called
A) pure monopoly. B) monopolistically competitive. C) oligopolistic behavior. D) perfectly competitive.
In which of the following industries are the firms price-takers?
a. monopoly b. monopolistically competitive c. monopoly and monopolistically competitive d. perfectly competitive e. perfectly competitive and monopolistically competitive