Which of the Following Should Be Expected If the Tax

question 19

Multiple Choice

Which of the following should be expected if the tax for a certain good increases?

• A) price of the good increases.
• B) the composition of the commodity bundle is distorted.
• C) the budget line pivots out.
• D) the composition of the commodity bundle is distorted and the price of the good increases.

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Definitions:

Substantially Lessen Competition

A legal standard used in antitrust law to evaluate the potential anticompetitive effects of mergers, acquisitions, or other business practices.

Tying Arrangement

A commercial agreement requiring buyers to purchase an additional product or service when buying a desired product or service.

LED Screens

Displays that utilize Light Emitting Diodes to produce images, widely used in televisions, computer monitors, and digital signage.

Servicing

The process of managing and collecting payments on a loan, mortgage, or other financial debt.