A sales tax of $1 per unit of output is placed on a particular firm whose product

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A sales tax of $1 per unit of output is placed on a particular firm whose product sells for $5 in a competitive industry with many firms.
a) How will this tax affect the cost curves for the firm?
b) What will happen to the firm’s price, output, and profit?
c) Will there be entry or exit in the industry?
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Microeconomics

ISBN: 978-0132857123

8th edition

Authors: Robert Pindyck, Daniel Rubinfeld

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