When the Demand for a Product Is More Elastic Than

question 198

Multiple Choice

When the demand for a product is more elastic than the supply,

• A)consumers pay the majority of the tax on the product.
• B)consumers pay the entire tax on the product.
• C)firms pay the majority of the tax on the product.
• D)firms pay the entire tax on the product.

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Definitions:

Nature Of Gain

Refers to the type of profit obtained from various transactions, such as the sale of property, which affects how the gain is taxed.

Bankrupt

The legal status of a person or organization that cannot repay the debts it owes to creditors, typically resulting in court intervention and the distribution of assets to creditors.

Worthless Stock

Shares that have lost all market value, often due to the company's bankruptcy, possibly eligible for tax deduction as a capital loss.

Nature Of Loss

A classification that determines how a loss is treated for tax purposes, often related to whether it's from a capital asset, ordinary income, or other sources.