Statistical correlation always implies causation

Suppose the demand curve for a product is horizontal and the supply curve is upward sloping. If a per-unit tax is imposed in the market for this product

A) buyers bear the entire burden of the tax. B) the tax burden will be shared by buyers and sellers. C) the tax burden will be shared among the government, buyers, and sellers. D) sellers bear the entire burden of the tax.

Refer to Horizontal Merger. If area F + G is larger than area E, we can conclude that the horizontal merger

The following questions refer to the accompanying diagram, which shows the effects of a horizontal merger. Before the merger, the firm behaves competitively producing Q0 and charging P0. The merger lowers the firm's marginal cost and gives the firm enough market power to switch to the monopoly equilibrium.


a. will reduce economic efficiency.
b. causes both consumers' and producer's surplus to rise.
c. will not increase the firm's profit and thus will not be undertaken.
d. creates an increase in social gain.