Per-unit taxes have which effect on the equilibrium price of a good?
a. They cause demand curves to shift downward, thus lowering price.
b. They cause demand curves to shift downward, thus raising price.
c. They cause supply curves to shift downward, thus lowering price.
d. They cause supply curves to shift upward, thus lowering price.
e. They cause supply curves to shift upward, thus raising price.
E
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Complementary goods are goods people consume together, such as peanut butter and jelly. If the price of peanut butter falls, we predict
A) the demand for peanut butter would increase. B) the demand for jelly would increase. C) the demand for peanut butter would decrease. D) the demand for jelly would decrease.
If marginal revenue on the tenth unit of output equals $4 for a non-discriminating, profit-maximizing monopolist, then price: a. equals $4
b. is less than $4. c. is greater than $4. d. must be equal to average total cost.