Imposition of an output tax on all firms in a competitive industry wil

Imposition of an output tax on all firms in a competitive industry will result in

A) a downward shift in each firm’s marginal cost curve.
B) a downward shift in each firm’s average cost curve.
C) a leftward shift in the market supply curve.
D) the entry of new firms into the industry.
E) higher profits for the industry as price rises.

ANSWER

C