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If the Government Places a $2 Tax on Each Unit

Question 223

Multiple Choice

If the government places a $2 tax on each unit of good X that is produced by Firm A, it follows that the tax will not affect __________ cost, but will affect __________ cost.


A) variable; fixed
B) fixed; variable
C) average fixed; average variable
D) marginal; fixed
E) b and c

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