Let's say the government imposes a one-time, flat tax on each business operating in a fully competitive sector. After the implementation of this tax, which of the following will be accurate? a. Consumer prices will increase b. There will be no change in any firm's level of profits c. A deadweight efficiency loss will occur d. There will be no change in the market quantity of output

Let's say the government imposes a one-time, flat tax on each business operating in a fully competitive sector. After the implementation of this tax, which of the following will be accurate? a. Consumer prices will increase b. There will be no change in any firm's level of profits c. A deadweight efficiency loss will occur d. There will be no change in the market quantity of output

Personal Finance

13th Edition

ISBN:9781337669214

Author:GARMAN

Publisher:GARMAN

Chapter4: Managing Income Taxes

Section: Chapter Questions

Problem 1LTAI

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Assume the government introduces a lump-sum tax on each firm within a perfectly competitive industry. Which of the following will be true after the introduction of this tax? a. Consumer prices will increase b. There will be no change in any firm’s level of profits c. A deadweight efficiency loss will occur d. There will be no change in the market quantity of output
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