Producers Will Sometimes Lower the Quality of a Good When

question 79

Multiple Choice

Producers will sometimes lower the quality of a good when the government imposes:

• A)any price control.
• B)an excise tax.
• C)a binding price floor.
• D)a binding price ceiling.

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Definitions:

Tax Burden

The measurement of how much of a tax's economic weight falls on an individual or economic entity, including both the direct and indirect effects.

Consumers

Individuals or groups who use goods and services generated within the economy, contributing to demand.

Perfectly Elastic

This term refers to a situation in demand or supply where the quantity demanded or supplied responds infinitely at a particular price level.

Excise Tax

A type of tax imposed on specific goods, services, or transactions, often with the intent of discouraging their use or consumption, or to raise revenue.