The Graph Shows the Supply Curve for a Product Before

question 246

Multiple Choice

The graph shows the supply curve for a product before tax ( S ₀ ) and after an excise tax is imposed ( S ₁) . If 500 units of the product are sold after the tax is imposed, the amount of tax revenue going to the government is

• A)$125.
• B)$250.
• C)$375.
• D)$500.

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Definitions:

Income Statement

A financial statement that shows a company's revenues, expenses, and net income or loss over a specific period.

Acid Test Ratio

A financial metric that evaluates a company's ability to pay off its current liabilities with quick assets like cash, marketable securities, and accounts receivable.

Current Liabilities

Short-term financial obligations that are due within one year or within the normal operating cycle of a business.

Accounts Receivable

Money owed to a business for goods or services that have been delivered or used but not yet paid for by customers.