Question

1. In the market for pineapple. the demand curve is downward sloping and the supply curve is horizontal. The market is currently at equilibrium. If a per unit tax is imposed on pineapple, the burden of the tax is heavier for consumers.

   True

   False

Answer 1

True.

All firms have identical cost conditions. Hence, in the case of a constant cost industry, the long-run supply curve LSC is a horizontal straight line (i.e., perfectly elastic) at the price OP, which is equal to the minimum average cost. This means that whatever the output supplied, the price would remain the same. Thus when the per unit tax is imposed the burden of tax will be heavier on the Consumer as the price remain same. For all the Quantities.

NOTE: I HOPE YOU WILL BE SATISFIED WITH MY ANSWER PLEASE DO PROVIDE RATING. THANK YOU AND HAVE A NICE DAY. :))