Good a Has a Perfectly Inelastic Demand and an Upward-Sloping

question 119

Multiple Choice

Good A has a perfectly inelastic demand and an upward-sloping supply curve.Good B has a perfectly inelastic supply and a downward-sloping demand curve.If the same sales tax is imposed on the sellers of both good A and good B,the

• A)price paid by buyers of good B rises by more than the price paid by buyers of good A.
• B)price paid by buyers of good A rises by more than the price paid by buyers of good B.
• C)price paid by buyers of good A rises by the same amount as the price paid by buyers of good B.
• D)quantity bought by buyers of good B decreases by more than the quantity bought by buyers of good A.
• E)quantity bought by buyers of good A decreases by more than the quantity bought by buyers of good A.

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Definitions:

Sales Mix

Sales mix is the proportion of different products or services that a business sells, impacting the overall profitability based on the differing margins of each item.

Operating Income

Profit realized from a business's core operations, calculated before taxes and interest.

Contribution Margin Ratio

A financial metric showing the percentage of sales revenue remaining after variable production costs have been deducted, indicating how much contributes towards covering fixed costs and generating profits.

Net Operating Income

Profit generated from a company's regular business operations, excluding deductions for interest and taxes.