Higher price equal to the old market price plus the tax

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If a tax is levied on the output of a competitive firm, the firm acts as though A. Its marginal cost has increased at all output levels by the amount of the tax. B. The price of its output has risen by the amount of the tax. C. The government is encouraging more production of the good. D. Consumers must pay a higher price equal to the old market price plus the tax.

Reference no: EM131061059

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