In the long run, a tax placed on a perfectly competitive industry should

Name: In the long run, a tax placed on a perfectly competitive industry should
Brand: Quizplus
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Question

Quizplus · Accepted Answer

A tax on a perfectly competitive industry will increase the costs of production for each firm, leading to a decrease in profits. This decrease in profits will incentivize firms to leave the market, reducing the number of firms in the industry in the long run. Therefore, the correct answer is B.

In the Long Run, a Tax Placed on a Perfectly