The policy affects the consumption in the short run and in the long run.

Question

Pretzel stands in New York City are a perfectly competitive industry in long-runequilibrium. One day, the city starts imposing a $100 per month tax on each stand.How does this policy affect the number of pretzels consumed in the short run and thelong run?a. down in the short run, no change in the long runb. up in the short run, no change in the long runc. no change in the short run, down in the long rund. no change in the short run, up in the long run

Answer 1

Question

Chapter 14, Problem 6QCMC

To determine

The policy affects the consumption in the short run and in the long run.

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Pretzel stands in New York City are a perfectly competitive industry in long-runequilibrium. One day, the city starts imposing a $100 per month tax on each stand.How does this policy affect the number of pretzels consumed in the short run and thelong run?a. down in the short run, no change in the long runb. up in the short run, no change in the long runc. no change in the short run, down in the long rund. no change in the short run, up in the long run

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