Figure 8-3 the Vertical Distance Between Points a and C Represents a Represents

question 176

Multiple Choice

Figure 8-3
The vertical distance between points A and C represents a tax in the market.
-Refer to Figure 8-3.Which of the following equations is valid for the tax revenue that the tax provides to the government?

• A)Tax revenue = (P2 - P1)xQ1
• B)Tax revenue = (P3 - P1)xQ1
• C)Tax revenue = (P3 - P2)xQ1
• D)Tax revenue = (P3 - P1)x(Q2 - Q1)

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Definitions:

Debt Investments

Financial assets involving lending money to an entity (corporate or governmental) that borrows the funds for a defined period at a variable or fixed interest rate.

Face Value

The nominal or dollar value printed on a bond, share, or other financial instrument, representing its value at issuance.

Bond Premium

The amount by which the market price of a bond exceeds its face value, typically occurring when the bond's interest rate is higher than current market rates.