According to the Information Provided, If a Tax of $2

question 110

Multiple Choice

According to the information provided, if a tax of $2 is levied on each bottle of micro-brewed beer, what is the deadweight loss of the tax?

• A)zero
• B)$4
• C)$8
• D)$12

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Definitions:

Traceable Fixed Expense

A fixed expense that can be directly linked to a specific department, project, or segment of a business.

Net Operating Income

The amount of profit realized from a company's operations after subtracting operating expenses but before interest and taxes.

Price Hike

An increase in the selling price of goods or services, often due to higher costs or improved demand.

Value-Based Pricing

Setting the price of a product or service based on the perceived value it offers to customers rather than its cost of production.