Producers Will Lose No Producer Surplus Due to a Tax

question 30

Multiple Choice

Producers will lose no producer surplus due to a tax if supply 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:

Competitor's Brand

The brand or product that competes directly with another company's offerings in the market.

Masked Branding

A marketing strategy where a product's branding is deliberately understated or hidden, making the brand's presence less obvious to the consumer.

Stimulus Generalization

A psychological phenomenon in which a response to a specific stimulus becomes triggered by stimuli that are similar to the original stimulus.

Marketers

Professionals responsible for promoting and selling products or services, including market research and advertisement strategies.