nopollst perlectly competitive firm\'s marginal-revenue curve is perfectly elast
ID: 1129869 • Letter: N
Question
nopollst perlectly competitive firm's marginal-revenue curve is perfectly elastic; a mo marginal-revenue curve is downward sloping level ofmetii firm cannot choose its level of output: a monopolist chooses polist chooses its level of output. d, perfectly competitive firm sets average revenue equal to marginal cost; a mono onopolist sets average revenue equal to marginal revenue. 16. If cigarettes and marijuana had been found to be substitutes, what would a tax p rijuana had been found to be substitutes, what would a tax placed on cigarettes a. increase the demand for marijuana b. decrease the demand for marijuana c. increase the quantity demanded of marijuana d. d ecrease the quantity demanded of marijuana 17. Which of the following events would NOT shift the labour supply curve? changing attitudes towards work changes in alternative opportunities increases in worker productivity immigration of workers a. b. c. d. Page SExplanation / Answer
A tax on cigarettes means equilibrium price of cigarettes will increase. As marijuana and cigarettes are substitute of each other, therefore buyers will be more likely to increase their demand for marijuana(equilibrium price in marijuana market remains same) and decrease their quantity demand of cigarettes(as cigarettes price increases), because they know they can get the same taste as cigarettes, by consuming marijuana.
note- increase in demand means demand curve will shift and increase in quantity demanded means there will be a movement along the demand curve. A change in price of one good shifts the demand curve for it's substitute goods.
Answer- option A
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