Which of the Following Statements Is TRUE? I

question 27

Multiple Choice

Which of the following statements is TRUE? I. Taxes may reduce consumption by exactly the same amount as government regulations. II. Taxes typically cost more than government regulations because taxes raise prices whereas regulations simply limit quantity. III. Command-and-control policies effectively reduce consumption; but may not be the lowest cost method for doing so.

• A) I and II only
• B) I and III only
• C) II only
• D) II and III only

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Definitions:

Merchandise Inventory

Goods or stock that a retailer, wholesaler, or distributor holds for the purpose of resale to customers.

Sales Returns

Transactions where customers return previously purchased merchandise, leading to a refund or credit.

Selling Price

The price at which a good or service is offered to a buyer.

Perpetual Inventory System

An inventory accounting system where updates are made continuously as transactions occur, providing a real-time inventory level.