Some Enterprising Individuals Produce and Sell Alcoholic Beverages Without Collecting

question 200

Multiple Choice

Some enterprising individuals produce and sell alcoholic beverages without collecting or paying legally required taxes.These "moonshiners" often have to hide their production facilities and hire fast driving delivery personnel to avoid various authorities.These moonshiners

• A)are taking advantage of obvious loopholes in the tax rules.
• B)are making the alcohol taxes more regressive by altering who pays the taxes.
• C)are indicative of the tax's excess burden even if their actions may reduce excess burden relative to no moonshining.
• D)are able to avoid the tax burdens on the moonshined alcohol assuming they are not caught and fined by the authorities.

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Definitions:

Demand Schedule

A table that shows the quantity of goods or services that consumers are willing and able to purchase at various price levels.

Perfectly Competitive

A market structure characterized by a large number of buyers and sellers, homogenous products, and no barriers to entry or exit.

Duopoly Market

A market structure dominated by only two producers or sellers, leading to a form of competition that significantly impacts pricing and output decisions.

Merging Firms

The process where two or more companies combine into a single company, often to expand market share, reduce costs, or increase competitiveness.