Economics 9708 · AS & A Level · Maximum and minimum prices

Maximum and minimum prices — practice question

A government levies a $10 tax on every unit of output for a product. How will this influence the firm?

  • AIts average cost will rise by less than $10.
  • BIts marginal cost will remain unchanged.
  • CIts minimum average cost output will be lower.
  • DIts minimum average cost output will be unchanged.

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