Answer to Question #29259 in Microeconomics for Mariana

Question

whether a flat per-unit tax is imposed on producers or consumers is basically irrelevant, because:
-equilibrium price and quantity will adjust but prodecers' revenue will not change
- the only difference between the two cases is the posted price
- the demand is never upwarv sloping
which one of the above chices is correct?

Answer 1

A flat tax (short for flat tax rate) is a tax system with a constant marginal rate, usually applied to individual or corporate income. A flat tax falls under proportional tax as they allow certain deductions. There are various tax systems that are labeled "flat tax" even though they are significantly different.
A per unit tax, or specific tax, is a tax that is defined as a fixed amount for each unit of a good or service sold, such as cents per kilogram. It is thus proportional to the particular quantity of a product sold, regardless of its price. Excise taxes, for instance, fall into this tax category. By contrast, an ad valorem tax is a charge based on a fixed percentage of the product value. Per unit taxes have administrative advantages when it is easy to measure quantities of the product or service being sold.
So, the right answer will be "equilibrium price and quantity will adjust but producers' revenue will not change" because as the amount of total task will not change, the revenues will also be the same.