Which of the following quantities decrease in response to a tax on a good?
a. the equilibrium quantity in the market for the good, the effective price of the good paid by buyers, and consumer surplus
b. the equilibrium quantity in the market for the good, producer surplus, and the well-being of buyers of the good
c. the effective price received by sellers of the good, the wedge between the effective price paid by buyers and the effective price received by sellers, and consumer surplus
d. None of the above is necessarily correct unless we know whether the tax is levied on buyers or on sellers.
b
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In price-taker markets, individual firms have no control over price. Therefore, the firm's marginal revenue curve is
a. a downward-sloping curve. b. indeterminate. c. constant at the market price of the product. d. precisely the same as the firm's total revenue curve.
If a firm has implicit costs as well as explicit costs
A) net income will always be less than accounting profit. B) accounting profit will be zero. C) net income will always be greater than accounting profit. D) economic profit will be less than accounting profit.