True or false: In the long run, a fixed tax per firm will have no effect...

True or false: In the long run, a fixed tax per firm will have no effect on the profit maximizing rate of output. Briefly explain your answer

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Expert Solution

Answer - True

In the long run , the supply will be perfectly elastic , this means that the imposition of tax will be on the consumer and it will impact the consumer surplus and will not affect the supply. Hence the output will not change. So the given statement is correct.

Rahul Sunny answered 2 years ago

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