Consumers Will Lose No Consumer Surplus Due to a Tax

question 15

Multiple Choice

Consumers will lose no consumer surplus due to a tax if demand in their market is perfectly elastic because

• A) consumers can effortlessly change their behavior in response to the tax.
• B) firms will decide not to pay the tax to the government.
• C) the government will decide to tax something else.
• D) the amount of the tax is relatively low.
• E) producers can effortlessly change their behavior in response to the tax.

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Definitions:

Generating Profits

The process by which a business generates a financial gain, typically through the sale of goods or services more than the cost of production.

Performance-Improving Innovations

Performance-improving innovations refer to new or significantly improved products, services, processes, or methods that directly contribute to enhancing efficiency, productivity, or performance levels within an organization.

Enhanced User-Interfaces

Improvements and advancements in the design and functionality of user interfaces to make them more intuitive, accessible, and user-friendly.

Innovation

The process of creating new ideas, products, or methods, which bring improvements or solve problems in novel ways.