Use the Following to Answer Questions

question 77

Multiple Choice

Use the following to answer questions .
Exhibit: Demand and Supply of Gasoline
-(Exhibit: Demand and Supply of Gasoline) Given the initial equilibrium of S₁ and D, any price lower than _____________ will create pressure for the price to ________ .

• A) $2.00; fall
• B) $2.50; rise
• C) $3.00; rise
• D) none of the above are true

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Definitions:

Double Taxation

The imposition of two separate taxes on the same asset, income, or financial transaction, often seen when corporate earnings are taxed both at the corporate level and again when distributed as dividends to shareholders.

Corporation

A legal entity recognized by law as separate from its owners, with its own rights, responsibilities, and liabilities.

Going-concern Assumption

An accounting principle that assumes a business will continue to operate indefinitely, rather than being liquidated.