If a Firm Faces _______, While the Prices for the Output

question 13

Multiple Choice

If a firm faces _______, while the prices for the output the firm produces remain unchanged, a firm's profits will increase.

• A) higher demand
• B) lower costs of production
• C) equilibrium
• D) a shift in demand

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Definitions:

Redistribution of Income

A policy or process whereby wealth is reallocated from certain individuals or groups to others, often through taxation and welfare systems, with the aim of achieving social equity.

Stabilization

is the process of maintaining or bringing an economic system to a state of balance and reducing volatility.

Excise Tax

A tax imposed on specific goods, services, and activities, such as gasoline, alcohol, and tobacco, often included in the purchase price, used by governments to generate revenue or discourage consumption.

Regressive

A term especially used in taxation to describe a situation where the tax rate decreases as the amount subject to taxation increases.