Which of the Following Statements Is Correct

question 223

Multiple Choice

Which of the following statements is correct?

• A) Whenever a per-unit tax is imposed, sellers always pass on the full amount of the tax to consumers in the form of higher prices.
• B) The burden of a per-unit tax on cigarettes would likely fall more on consumers than would the burden of a tax on imported bottled water.
• C) The burden of a per-unit tax is always equally shared between producers and consumers.
• D) When a per-unit tax is imposed, the total losses to producers and consumers exactly equal the amount of revenue collected by the government.

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Definitions:

Variable Labor Cost

Costs for labor that change in proportion to the level of production or sales in a company.

Break-even Point

The point at which total costs and total revenue are equal, meaning there is no net loss or gain, and a business is not making a profit but not losing money either.

Contribution Format

A method of income statement presentation where costs are separated into variable and fixed categories.

Income Statement

A financial statement that reports a company's financial performance over a specific period, detailing revenue, expenses, and profits.