If There Is No Change in Equilibrium Price After a $1

question 2

True/False

If there is no change in equilibrium price after a $1 per unit tax is imposed on suppliers, demand must be perfectly inelastic.

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Definitions:

Annual Interest Tax Shield

The reduction in income taxes a company achieves through deductible interest expenses.

Coupon Rate

The annual interest rate paid by a bond, expressed as a percentage of the bond's face value.

Tax Rate

The percentage at which an individual or corporation is taxed, which can apply to income, capital gains, or property values.

Earnings Per Share

A measure of a company's profitability that calculates the portion of a company's profit allocated to each outstanding share of common stock.