The federal government is considering levying taxes on smart phone manufactures. They are considering two proposals: A
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Question:
The federal government is considering levying taxes on smart phone manufactures. They are considering two proposals:
A lump-sum tax of $ 1m. On each manufacturer.
A tax of 8 100 per smart phone, paid by producers of smart phones.
(a) Which of the following curves–average fixed cost, average variable cost, average total cost, and marginal cost – would shift as a result of the lump-sum tax? Why? Show this in a graph, labeling the graph as precisely as possible.
(b) Which of these same four curves would shift as a result of the per-phone tax? Shoe this in a graph, again labeling as precisely as possible.
Related Book For
Business Statistics a decision making approach
ISBN: 978-0133021844
9th edition
Authors: David F. Groebner, Patrick W. Shannon, Phillip C. Fry
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