Refer to Scenario 8.2. The result of the tax in the long run will be that:

A) Q falls from 30,000; P rises by less than $20,000.
B) Q falls from 30,000; P rises by $20,000.
C) Q falls from 30,000; P does not change.
D) Q stays at 30,000; P rises by $20,000.
E) Q stays at 30,000; P rises by less than $20,000.

Perfectly Competitive

A market structure characterized by a large number of small firms, a homogeneous product, perfect information, and free entry and exit.

Elastic

A term used to describe a good's demand sensitivity to changes in price; highly elastic means demand changes significantly with price changes.

Industry Output

The total production of goods and services produced by an industry within a specific period.