A per-unit excise tax on a single competitive firm causes:
A)all cost curves,except the total fixed cost curve to increase by the amount of the tax.
B)all per-unit cost curves to increase by less than the amount of the tax.
C)all per-unit cost curves,except the marginal cost curve,to decrease by the amount of the tax.
D)all per-unit cost curves and the marginal cost curve to increase by the amount of the tax.

Question

Quizplus · Accepted Answer

An excise tax increases the cost of producing each unit of output, which directly increases the marginal cost of production. Since marginal cost influences all per-unit cost curves (average total cost, average variable cost, etc.), they all increase by the amount of the tax.

A Per-Unit Excise Tax on a Single Competitive Firm Causes