Total Surplus in a Market Will Increase When the Government

question 11

Multiple Choice

Total surplus in a market will increase when the government

• A)imposes a binding price floor or a binding price ceiling on that market.
• B)imposes a tax on that market.
• C)Both a and b are correct.
• D)Neither a nor b is correct.

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Definitions:

Variable Expenses

Costs that change in proportion to the level of activity or production volume.

Break-Even Sales

The amount of revenue needed to cover all fixed and variable costs, resulting in a net income of zero.

Retail Division

A segment of a company that directly sells products to consumers, typically involving activities and costs related to retail operations.

Segmented Income Statement

An income statement that breaks down revenues, cost of sales, and expenses by segments such as product lines, departments, or geographic regions.