The Primary Objective of a Sin Tax Is to Generate

question 238

True/False

The primary objective of a sin tax is to generate additional revenue for the government.

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Definitions:

Dominant Firm

A company that has a large majority share of the market and can significantly influence the market price and competition.

Market Demand Curve

A graphical representation showing the relationship between the quantity of a good consumers are willing and able to purchase and the price of the good.

Profit-maximizing Output

The level of production at which a business achieves the highest possible profit.

Cournot Model

An economic model used to describe an industry structure in which companies compete on the amount of output they will produce, which they decide upon independently of each other and at the same time.