Suppose Demand Has Price Elasticity of 1 Everywhere and the Industry

question 5

True/False

Suppose demand has price elasticity of 1 everywhere and the industry is perfectly competitive with identical firms.In the long run, tax revenue increases as tax rates increase.

---

Definitions:

Accounting Period

A specific time frame for which financial information is reported, commonly a year, quarter, or month.

Equality

A principle in accounting that refers to the balance between total debits and total credits in a double-entry bookkeeping system.

Post-Closing Trial Balance

A list of all active general ledger accounts and their balances after closing entries have been posted, used to check the accuracy of closing procedures.

Closing Entries

Journal entries made at the end of an accounting period to transfer temporary accounts' balances to permanent accounts, preparing the books for the next period.