If Demand Is Perfectly Elastic, a Sales Tax Is Paid

question 279

Multiple Choice

If demand is perfectly elastic, a sales tax is paid by

• A) only the buyers.
• B) only the sellers.
• C) both the buyers and sellers.
• D) None of the above answers is correct.

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Definitions:

Income from Operations

Net earnings generated from a company's normal business operations, excluding revenues and expenses from non-operational activities.

Periodic Inventory System

An inventory system where updates to inventory levels are made on a periodic basis rather than continuously.

Cost of Goods Sold

Cost of Goods Sold (COGS) refers to the direct costs attributable to the production of the goods sold by a company, including materials and labor.

Purchases

The total amount of goods and materials acquired by a business for the purpose of resale or production during a specific accounting period.