A Tax in an Industry Would Result In

question 122

Multiple Choice

A tax in an industry would result in:

• A)​a decrease in consumer surplus.
• B)​a decrease in producer surplus
• C)​a decrease in the gains from trade.
• D)​all of the above.

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Definitions:

Positive NPV

An indication that an investment is expected to generate earnings greater than the costs, with a Net Present Value above zero, suggesting it's a profitable venture.

Projected Cash Flow

An estimate of the amount of money expected to flow in and out of a business over a future period, considering both income and expenses.

NPV

Net Present Value; a calculation used to determine the value of an investment by considering the present value of its expected future cash flows minus the initial investment cost.

Contribution Margin

The amount by which a product's sales price exceeds its total variable costs, indicating how much contribution the product makes towards fixed costs and profits.