A Per Unit Tax in a Competitive Market with Demand

question 55

Multiple Choice

A per unit tax in a competitive market with demand elasticity less than zero:

• A)never creates dead weight loss.
• B)decreases the equilibrium price.
• C)always creates dead weight loss.
• D)sometimes creates dead weight loss.

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Definitions:

Consumers' Opinions

Refers to the beliefs, perceptions, or attitudes that individuals hold regarding products, services, or brands based on their personal experiences.

Behavioral Segmentation

The process of dividing a market into groups based on consumer behavior patterns such as usage rate, purchase history, and brand interactions.

Usage Rate

The frequency with which consumers use a product, often used to segment markets or tailor marketing strategies.

Psychographics

The study and classification of people according to their attitudes, aspirations, and other psychological criteria, especially in market research.