If Higher Taxes Raise the Unit Cost of a Competitive

Multiple Choice

If higher taxes raise the unit cost of a competitive industry, then producers

A) decrease production in the short run and the number of producers decreases in the long run.
B) decrease production in the short run and the number of producers increases in the long run.
C) increase production in the short run and the number of producers decreases in the long run.
D) increase production in the short run and the number of producers increases in the long run.
E) keep production constant in the short run and the number of producers remains the same in the long run.