
-Suppose that production of the product in Figure 14-2 imposes a cost on society of $7.00 per unit.If the government imposes a tax of $7.00 per unit of output on the producer the equilibrium price will
A) rise by $7.00
B) fall by $7.00
C) rise by $2.50
D) fall by $2.50
E) not change
Correct Answer:
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