Business, 21.01.2021 14:00 justttlearnnn12333
Problem 5: The local government in Karachi is considering two tax proposals:
• A lump-sum tax of Rs. 300 on each producer of Ice-cream.
• A tax of Rs. 1 per unit of Ice-cream, paid by producers of Ice-cream.
a. Which cost curves; average fixed cost, the average variable cost, average total cost, and marginal cost would shift as a result of the lump-sum tax? Why?
b. Which cost curves; average fixed cost, the average variable cost, average total cost, and marginal cost would shift as a result of the per-unit tax? Why?
Answers: 3
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Problem 5: The local government in Karachi is considering two tax proposals:
• A lump-sum tax of Rs...
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