Answer to Question #48869 in Microeconomics for Emily McLean

Question

True or False:

Assume a perfectly competitive industry where the firms are identical, each with U-shaped short run and long run average cost curves. In the short run, consumers bear none of the burden of a "per firm" tax, while in the long run, consumers bear the entire burden.

Answer 1

This is said to be true because mostly during the short run a firm normally incures more costs in advertising the products and reducing the price of goods to attract demand, hence low prices to consumers shows that they don't bear tax.
So, the statement is true.