Suppose the Supply Curve and the Demand Curve Both Have

question 93

Multiple Choice

Suppose the supply curve and the demand curve both have unitary elasticity at all prices.The price increase to consumers resulting from a specific tax of $1 imposed on sellers will be

• A) $1.
• B) 50 cents.
• C) zero.
• D) impossible to calculate without knowing the slope of the supply curve.

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Definitions:

Retained Earnings

Retained earnings represent the portion of a company's profit that is retained within the business rather than distributed to shareholders as dividends, often used for reinvestment.

Dividend

A payment made by a corporation to its shareholders, usually in the form of cash or stock, from its earnings.

Loss

The reduction in the financial valuation of an investment, or when expenses exceed the income or total amount invested.

Net Capital Spending

The total spending on fixed assets minus the proceeds from the sale of fixed assets.