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Please answer the mcq What is the effect on the short-run equilibrium of a specific tax of t per unit that is collected from all
Please answer the mcq
What is the effect on the short-run equilibrium of a specific tax of t per unit that is collected from all n firms in a market? What is the incidence of the tax? Show how the tax shifts a typical firm's marginal cost and average cost curves and hence its supply curve. Suppose the typical firm's before-tax marginal cost curve is MC1 and its before-tax average cost curve is AC1 in the figure to the right. As a function of t,MC1, and AC1, the marginal cost with the tax (MC2) is MC2=MC1+t and the average cost with the tax(AC2) is AC2=AC1+t (Properly format your expressions using the tools in the palette. Hover over tools to see keyboard shortcuts. E.g., a superscript can be created with the character.) The typical firm's new supply curve (S2) is A. S2=MC2 above the minimum average total cost of production. B. S2=MC2 above the minimum average variable cost of production. C. S2=MC2 above the minimum average fixed cost of production. D. S2=MC1. E. S2=MC1 above the minimum average variable cost of production. What is the effect on the short-run equilibrium of a specific tax of t per unit that is collected from all n firms in a market? What is the incidence of the tax? Show how the tax shifts a typical firm's marginal cost and average cost curves and hence its supply curve. Suppose the typical firm's before-tax marginal cost curve is MC1 and its before-tax average cost curve is AC1 in the figure to the right. As a function of t,MC1, and AC1, the marginal cost with the tax (MC2) is MC2=MC1+t and the average cost with the tax(AC2) is AC2=AC1+t (Properly format your expressions using the tools in the palette. Hover over tools to see keyboard shortcuts. E.g., a superscript can be created with the character.) The typical firm's new supply curve (S2) is A. S2=MC2 above the minimum average total cost of production. B. S2=MC2 above the minimum average variable cost of production. C. S2=MC2 above the minimum average fixed cost of production. D. S2=MC1. E. S2=MC1 above the minimum average variable cost of productionStep by Step Solution
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