Answer to Question #29259 in Microeconomics for Mariana
-equilibrium price and quantity will adjust but prodecers' revenue will not change
- the only difference between the two cases is the posted price
- the demand is never upwarv sloping
which one of the above chices is correct?
A per unit tax, or specific tax, is a tax that is defined as a fixed amount for each unit of a good or service sold, such as cents per kilogram. It is thus proportional to the particular quantity of a product sold, regardless of its price. Excise taxes, for instance, fall into this tax category. By contrast, an ad valorem tax is a charge based on a fixed percentage of the product value. Per unit taxes have administrative advantages when it is easy to measure quantities of the product or service being sold.
So, the right answer will be "equilibrium price and quantity will adjust but producers' revenue will not change" because as the amount of total task will not change, the revenues will also be the same.
Need a fast expert's response?Submit order
and get a quick answer at the best price
for any assignment or question with DETAILED EXPLANATIONS!