Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
Consumer prices will decrease
B
Consumer prices will remain the same
C
Consumer prices will increase
D
Consumer prices will fluctuate unpredictably
Understanding the Answer
Let's break down why this is correct
Answer
A per-unit tax is a fee that the government charges for each unit of a product sold. When this tax is added, businesses typically raise the price of the product to cover the extra cost. For example, if a company sells a drink for $2 and faces a $0. 50 per-unit tax, they might increase the price to $2. 50 to maintain their profits.
Detailed Explanation
When a tax is added to each unit sold, sellers often raise prices. Other options are incorrect because Some might think prices go down with a tax; It’s a common mistake to think prices stay the same.
Key Concepts
effects on consumer prices
Topic
Understanding Per-Unit Taxes
Difficulty
easy level question
Cognitive Level
understand
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