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xeze [42]
3 years ago
13

Suppose sellers of perfume are required to send $1.00 to the government for every bottle of perfume they sell. Further, suppose

this tax causes the price paid by buyers of perfume to rise by $0.60 per bottle. Which of the following statements is correct?
a.

The effective price received by sellers is $0.40 per bottle less than it was before the tax.

b.

Sixty percent of the burden of the tax falls on sellers.

c.

This tax causes the demand curve for perfume to shift downward by $1.00 at each quantity of perfume.

d.

All of the above are correct.
Business
1 answer:
amm18123 years ago
5 0

Answer:

a. The effective price received by sellers is $0.40 per bottle less than it was before the tax.

Explanation:

When government imposes tax on a product, a seller's margin on such a product falls which the seller tries to recover from the buyer by raising the price of the product.

In the given case, $1 is tax payable to government out of which the seller recovers $0.60 from the buyer via increased price. So, the remaining $0.4 tax is being paid by the seller out of his own pocket.

Effective price received refers to net amount received by the seller after deducting expenses and taxes. So, in the given case, the seller now receives $0.4 less per bottle than the receipts before such tax was imposed.

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Explanation:

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Petroski Natural Dying Corporation measures its activity in terms of skeins of yarn dyed. Last month, the budgeted level of acti
algol13

Answer:

$577 Unfavorable

Explanation:

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Answer:

D) $4,200

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A stock expects to pay a dividend of $5.49 per share next year. Dividends are expected to grow at 20 percent per year for the fo
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Answer:

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In the attached excel file, the following formula is used:

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