Author Question: While taxing inelastic goods minimizes social costs from taxation, it frequently conflicts with ... (Read 106 times)

viki · **on:** Jul 1, 2018

While taxing inelastic goods minimizes social costs from taxation, it frequently conflicts with traditional notions of fairness.

a. True b. False

Question 2

Suppose that for each firm in the competitive market for potatoes, long-run average cost is minimized at 0.20 per pound when 500 pounds are grown. If the long-run supply curve is horizontal, then

A) some firms will enjoy long-run profits because they operate at minimum average cost.
B) the long-run price will be 0.20 per pound.
C) each consumer will purchase 100 worth of potatoes.
D) the long-run price will be set just above 0.20 per pound.