-In the Above Figure, in Order to Achieve Efficiency, a Tax

question 352

Multiple Choice

-In the above figure, in order to achieve efficiency, a tax of ________ per unit is needed.

• A) $3
• B) $6
• C) $0
• D) $2

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Definitions:

Preferred Stock

A class of ownership in a corporation that has a higher claim on its assets and earnings than common stock, often with fixed dividends.

Dividend

A portion of a company's earnings, decided by the board of directors, to be distributed among shareholders.

Stock Price

The cost of purchasing a single share of a company's stock on the open market.