A firm has price-setting power. In general, as demand becomes more elastic, the price to MC. If a firm decided to segment the Market between tourists (e = 1.5) and residents (e = 2.5) , which group will you charge more? a) Residents b) Tourists c ) Same price d) Can't tell A lump-sum tax: a) Affects VC, MC, and AVC b) Affects AC only c) Affects, VC, MC, AVC, and AC d) Affects MC only A lump-sum tax (note; DWL = deadweight loss) : a) Creates DWL in both the short- and long-runs, because MC increases, Creates DWL in both the short- and long-runs, because AC increases , C ) Creates DWL in the short-run only, because AC increases. d ) Creates DWL in the long-run only, because MC doesn't change