What is meant by "tax incidence"?
What will be an ideal response?
Tax incidence refers to the actual division of the burden of a tax between buyers and sellers in a market.
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In the above figure, curve b shows the
A) bottles of soda that people are willing to forgo to get another bicycle. B) bottles of soda that people must forgo to get another bicycle. C) benefits of producing more bicycles is greater than the benefits of producing more soda. D) benefits of producing more soda is greater than the benefits of producing more bicycles.
Suppose the firm or firms in the market for Good A face a downward-sloping demand curve, maximize profit by producing the quantity at which marginal revenue equals marginal cost, set the price higher than the marginal cost, and break even in long run equilibrium. Which one of the following market structures most likely exists for Good A?
A. Perfectly competition. B. Monopoly. C. Monopolistic competition. D. Oligopoly.