If Buyers Are Required to Pay a Tax on Top

question 177

Multiple Choice

If buyers are required to pay a tax on top of the price, buyers' willingness to pay will:

• A) decrease and the demand curve will shift down.
• B) decrease and the demand curve will shift up.
• C) increase and the demand curve will shift down.
• D) increase and the demand curve will shift up.

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Definitions:

Discount

A discount refers to a reduction from the usual cost of goods or services, often used as a marketing strategy to increase sales or reward customers.

Sales Revenue

The income earned by a company from its sales of goods or services before any expenses are deducted.

Matching Principle

An accounting principle that requires companies to report expenses at the same time as the revenues they are related to, ensuring that financial statements accurately reflect business performance.

Recorded

Documented in official records or accounts.