In Which of the Following Cases Is It Most Likely

question 44

Multiple Choice

In which of the following cases is it most likely that an increase in the size of a tax will decrease tax revenue?

• A)The price elasticity of demand is small,and the price elasticity of supply is large.
• B)The price elasticity of demand is large,and the price elasticity of supply is small.
• C)The price elasticity of demand and the price elasticity of supply are both small.
• D)The price elasticity of demand and the price elasticity of supply are both large.

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Definitions:

Fair Value

The price that would be received for an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

Cash Consideration

The total amount of cash that is paid or received during a transaction, such as buying an asset or settling a liability.

Net Realisable Value

The estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale.

Relevant Exchange Rates

Exchange rates that are applied to convert foreign currencies into the reporting currency, crucial for accurately recording transactions in financial statements.