Ask Question
BusinessBusiness
10 January, 13:08

What is the impact of a production tax on the equilibrium price? The equilibrium price A. falls and the equilibrium quantity rises. B. rises and the equilibrium quantity rises. C. rises and the equilibrium quantity falls. D. falls and the equilibrium quantity falls.

+2
Answers (1)
  1. 10 January, 16:19
    0
    The answer is: C. rises and the equilibrium quantity falls.

    Explanation:

    The impact of a production tax on the equilibrium price will be that it increases and the equilibrium quantity decreases.

    A tax increases the price a buyer pays for a product, so if the price is higher, then the quantity demanded will be lower.

    It doesn't matter if the tax is levied upon the supplier or the buyer, since the result will be the same, a higher price for the product. The buyer only cares for the total price he or she pays (including taxes) and the producer only cares about the net revenue they get from a sale (discounting taxes).
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “What is the impact of a production tax on the equilibrium price? The equilibrium price A. falls and the equilibrium quantity rises. B. ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers
You Might be Interested in
A manufacturing shop is designed to operate most efficiently at an output of 1,090 units per day. In the past month the plant averaged 870 units per day. What was their capacity utilization rate last month
Answers (1)
Patrick sues Derek for negligence. During the trial, it is determined that Patrick's negligence was 40 percent responsible for his injury, and Derek's negligence was 60 percent responsible. Patrick's losses total $10,000.
Answers (1)
Consider a monopolist currently selling output Q to two different markets: Market A and Market B. This monopolist is able to price discriminate and charge different prices in these markets.
Answers (1)
Zitrik Corporation manufactured 130,000 buckets during February. The variable overhead cost-allocation base is $5.30 per machine-hour.
Answers (1)
Division A of Barsema, Inc. has operating data as follows: Capacity 20,000 units Selling price $80 per unit Variable costs $45 per unit Fixed costs $20 per unit Division B wants to purchase units from Division A.
Answers (1)
New Questions in Business
Briefly discuss the importance of the project charter, and compare the roles played by the project sponsor and the project manager with respect to the preparation of this document.
Answers (1)
Heritage, Inc., had a cost of goods sold of $45,321. At the end of the year, the accounts payable balance was $8,513. How long on average did it take the company to pay off its suppliers during the year
Answers (1)
The United States began collecting federal income tax in which year? A.) 1776 B.) 1861 C.) 1913 D.) 1955
Answers (2)
A company has the choice of either selling 1,000 unfinished units as is or completing them. The company could sell the unfinished units as is for $4.00 per unit. Alternatively, it could complete the units with incremental costs of $1.
Answers (1)
A merchandising company's sales budget indicates the following sales: January: $30,000; February: $20,000; March: $15,000. The company expects 80% of the sales to be on account.
Answers (1)
Home » Business » What is the impact of a production tax on the equilibrium price? The equilibrium price A. falls and the equilibrium quantity rises. B. rises and the equilibrium quantity rises. C. rises and the equilibrium quantity falls. D.
Sign Up Forgot Password?