<p>Can anyone explain number 2 part e in the year 2006?</p>
<p>I don't get why the unit tax doesn't affect the profit maximizing output... Does it go under fixed costs or something? Because MC is going to have to shift up right?</p>
<p>It’s been awhile since we did this, Micro was our first half of the year, but perhaps it has something to do with the fact that in the long-run, supply adjusts itself in a perfectly competitive market. Firms exit and enter etc. So perhaps in the short run the profit maximizing output would change, but in the long run firms would exit and the original output would be restored.</p>
<p>If this doesn’t seem correct to you, it probably isn’t. I need to review these chapters too.</p>
<p>hmm you might be right… Anyone else want to add to this?</p>
<p><a href=“Supporting Students from Day One to Exam Day – AP Central | College Board”>Supporting Students from Day One to Exam Day – AP Central | College Board;
<p>That doesn’t make much sense though. If ATC increases, and MC always intersects it at the lowest point, then MC has to go up too, right?</p>