When a tax is imposed on the buyers of a good, the demand curve shifts
a. upward by the amount of the tax.
b. downward by the amount of the tax.
c. upward by less than the amount of the tax.
d. downward by less than the amount of the tax.
b
You might also like to view...
Refer to Figure 13-4. What is the area that represents the loss made by the firm?
A) the area P1bcP2 B) the area P0acP2 C) the area P2cdP3 D) the area P0adP3
The perfectly competitive firm has no influence over price because
A. its output is so insignificant relative to the market as a whole. B. antitrust laws constrain perfectly competitive firms. C. consumers establish the prices of products. D. it doesn’t know its demand curve.
Perfectly competitive markets will tend to under-allocate resources to nonexclusive public goods because a. these goods are produced under conditions of increasing returns to scale
b. no single individual can appropriate the total benefits provided by the purchase of such goods. c. these goods are best produced under conditions of monopoly. d. no private producer can provide the capital necessary to produce such goods.
What would happen if a perfectly competitive firm decided to raise its prices by 1%?
a. The firm would increase revenues by 1%. b. The firm would increase market share by 1%. c. The firm would lose all of its market to its competitors. d. The firm would put all of its competitors out of business.