Considering a Given Increase in Price Due to a Tax

question 107

Multiple Choice

Considering a given increase in price due to a tax, the more price elastic the supply curve is, the:

• A)larger the drop in equilibrium quantity.
• B)smaller the drop in equilibrium quantity.
• C)smaller the amount of deadweight loss created.
• D)less surplus is transferred to consumers.

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Definitions:

Statement of Owner's Equity

A financial statement that shows the changes in the equity of a sole proprietorship over a period of time.

Worksheet

A worksheet in accounting is a document used for planning adjustments and reconciling accounts, aiding in the preparation of financial statements.

Income Statement

An Income Statement is a financial statement that shows a company's revenues and expenses over a specific period of time, culminating in net profit or loss.

Balance Sheet

An outline that captures a company's assets, debts, and the equity of its shareholders at a distinct point, illustrating the company's financial standing.