Suppose the demand curve for aluminum cans is downward sloping, and the cans are produced in a constant cost industry where the firms are price takers. A $.25-per-can tax is levied on aluminum cans. How much will the price of aluminum cans increase in the short run and the long run?
a. short run, $.25; long run, more than $.25
b. short run, less than $.25; long run, $.25
c. short run, less than $.25; long run, more than $.25
d. short run, $.25; long run, less than $.25
B
You might also like to view...
An advantage of imposing a tax on the producer that generates pollution is that
A) the government can keep tabs on exactly what is produced in an industry. B) it forces the polluting producer to internalize the external cost of the pollution. C) it will eliminate pollution. D) a producer can pass the cost of the pollution to consumers.
Refer to the demand and supply equations. At a price of $35, there will be ________
Fill in the blank(s) with correct word
Marge Sampson produces and sells 400 jars of homemade jelly each month for $3 each. Each month, she pays $200 for jars, $150 for ingredients, and uses her own time, with an opportunity cost of $500 . Her economic profits each month are:
a. $350. b. $500. c. $650. d. $700.
The real exchange rate is the amount of an overseas currency that can be purchased with the local (domestic) currency.
Indicate whether the statement is true or false.