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After an Excise Tax Is Imposed on a Good or Service

Question 32

Multiple Choice

After an excise tax is imposed on a good or service,


A) the equilibrium price and quantity are unchanged
B) firms must charge a higher price for any particular quantity
C) firms must charge a lower price for any particular quantity
D) the equilibrium price and quantity will both increase
E) the equilibrium price and quantity will both decrease

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