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-Refer to the Figure Above

Question 33

Multiple Choice

-Refer to the figure above. Assume the production of the product imposes a cost on society of R70.00 per unit. If the free market equilibrium output is 50 units, the government should A) impose a tax of R25.00 per unit. B) reduce the output of the firm by approximately 39 units. C) impose a lump-sum tax of R3 500 per period. D) impose a tax of R70.00 per unit.
-Refer to the figure above. Assume the production of the product imposes a cost on society of R70.00 per unit. If the free market equilibrium output is 50 units, the government should


A) impose a tax of R25.00 per unit.
B) reduce the output of the firm by approximately 39 units.
C) impose a lump-sum tax of R3 500 per period.
D) impose a tax of R70.00 per unit.

Correct Answer:

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