An Excise Tax _____ Consumer Surplus and _____ Producer Surplus

question 388

Multiple Choice

An excise tax _____ consumer surplus and _____ producer surplus.

• A) increases; increases
• B) increases; decreases
• C) decreases; increases
• D) decreases; decreases

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Definitions:

Quantity Demanded

The total amount of a good or service that consumers are willing and able to purchase at a given price in a specified time period.

Total Revenue

The entire amount of income generated by the sale of goods or services before any expenses are subtracted.

French-door Refrigerators

A style of refrigerator with two doors that open outward from the middle for the refrigerator section on top and a freezer drawer on the bottom.

Robinson-Patman Act

A United States federal law aimed at preventing unfair competition and price discrimination by regulating trade practices.