Suppose the unit tax imposed by the government is Rs 2. If the firm produces and sells 10 units of goods, the total tax that the firm must pay to the government is Rs.............
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → 20
Under a unit tax the firm pays the government a fixed amount on every unit of output it sells. So the total tax grows with sales: it is the tax per unit times the number of units sold.
Given:
Unit tax = Rs 2 per unit
Units produced and sold = 10
Working it out:
Total tax = Units sold × Tax per unit
Total tax = 10 × Rs 2 = Rs 20, which is Option (3)
Because the tax is paid on every unit, it raises the firm’s average cost and marginal cost at every level of output by Rs 2, and the firm’s supply curve shifts to the left.
NCERT: Introductory Microeconomics — Chapter 4: The Theory of the Firm under Perfect Competition (2025-26)
|
