Suppose Sellers of Perfume Are Required to Send $1

question 47

Multiple Choice

Suppose sellers of perfume are required to send $1.00 to the government for every bottle of perfume they sell.Further,suppose this tax causes the price paid by buyers of perfume to rise by $0.60 per bottle.Which of the following statements is correct?

• A)The effective price received by sellers is $0.40 per bottle less than it was before the tax.
• B)Sixty percent of the burden of the tax falls on sellers.
• C)This tax causes the demand curve for perfume to shift downward by $1.00 at each quantity of perfume.
• D)All of the above are correct.

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Definitions:

Customer Contact Audit

A systematic review of all the points at which a business interacts with its customers, aiming to improve service quality and customer satisfaction.

Flowchart

A diagram that displays a process or system using symbols and arrows to represent steps and the flow direction, respectively.

Relationship Customers

Customers with whom a business has established an ongoing relationship, characterized by repeated interactions and loyalty.

Loyalty

A consumer's commitment and repeated patronage to a brand or product, often driven by satisfaction, preference, or rewards programs.