Refer to the Accompanying Graph

question 41

Multiple Choice

Refer to the accompanying graph. If this firm is a price taker and the price of each unit of output is $15, then at this firm's profit-maximizing level of output, it will earn a ________ of ________.  

• A)loss; $60
• B)profit; $180
• C)loss; $300
• D)loss; $900

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Definitions:

Excise Taxes

Taxes imposed on specific goods, such as tobacco and alcohol, either as a fixed amount per unit or as a percentage of the price.

Regressive

Relating to a tax system that disproportionately impacts those with lower incomes, or to policies that may reverse political or social progress.

Regressive Tax

A tax imposed in such a way that the tax rate decreases as the taxable amount increases, disproportionately affecting lower-income individuals.

Payroll Tax

Levies charged on employers or workers, typically based on a proportion of the wages that staff receive from their employers.