Suppose that the government was taxing consumers of widgets by $3 per unit. Now it repeals...

Suppose that the government was taxing consumers of widgets by $3 per unit. Now it repeals the tax on consumers and replaces it with a $3 per unit tax on producers. What will happen to the price of widgets?

a. The price will rise by $3

b. The price will rise, but by less than $3

c. The price will be unchanged

d. The price will fall, but by less than $3

e. The price will fall by $3

Solutions

Expert Solution

Rahul Sunny answered 2 years ago

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