1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
aivan3 [116]
3 years ago
9

The government of Granita is thinking about imposing a very small tax on one or more of the following goods: anvils, books, and

cardigans. Anvils and books are both produced in competitive markets with constant marginal costs, while cardigans are produced by a monopoly with constant marginal costs. The elasticities of demand for the three goods are −3, −1.5, and −1.2, respectively. What good or goods should the government put the very small tax on if it wants to minimize the deadweight burden?
Business
1 answer:
Mariulka [41]3 years ago
6 0

Answer:

The government should tax Anvils and books but not cardigans

Explanation:

A perfect competition is characterised by many buyers and sellers of homogenous goods and services. Market prices are set by the forces of demand and supply.

A monopoly is when there is only one firm operating in an industry. The firm sets the market price for its good and services. The firm earns economic profit in the short and long run.

When the absolute value of elasticity is greater than 1, it means that demand is price elastic.

Elastic demand means a small change in price leads to a greater change in quantity demanded.

Deadweight loss refers to the loss in efficiency as a result of tax.

A competitive market produces as the social optimum, so the effect of tax would be very small but because the monopoly operates below social optimum, the cost of tax would be high.

I hope my answer helps you

You might be interested in
Why don't most tax expenditures help much if your federal tax bill is zero? You don't qualify for tax breaks if your federal tax
MakcuM [25]

Answer: Most tax breaks reduce taxable income, but reducing taxable income below zero does not reduce the tax bill.

Explanation:

Tax breaks can be used to reduce your taxable income sometimes all the way to zero. This however simply means that you don't have to pay income tax but does not mean that there won't be other taxes to pay.

Because of these additional taxes left to pay, a person will still pay certain taxes even if their taxable income is below zero. Tax expenditures therefore do not help much with a federal tax bill of zero.

6 0
2 years ago
You purchase an annuity due for $1,200. The annuity has 11 annual payments of 100 and a larger payment at the beginning of year
romanna [79]

Answer:

Give me brainliest pls! I neeed it to rank up jus pls do it!

Explanation:

8 0
3 years ago
Which one of the following would not be considered an advantage of the corporate form of organization?a. Limited liability of ow
solmaris [256]

Answer:

Disadvantage of Corporate Form of Organization:

d. Government regulation

Explanation:

In recent times, government regulation of businesses appears to be regarded as a disadvantage of the corporate form of organizations.  Governments intervene and regulate corporate entities whenever they fail to be self-regulatory.  But, the regulations may appear to be so much that the corporate form of organization now looks like a disadvantage.  Given the many corporate scandals, collapses, and misapplications of resources by corporate entities that have become the order of the day, government regulation is very important.  Without government regulation, many corporate bodies will not be acting in the public interest.  This is more so with public entity corporate organizations with diverse stakeholders and corporate managers who act as if they were running their own autonomous governments.

5 0
3 years ago
Mustang Corporation had 100,000 shares of $2 par value common stock outstanding. On December 31, 2018, the company's board of di
dezoksy [38]

Answer:

The following entry is made on the declaration date:    

Retained Earnings ( 20,000 x $10)  $200,000  Debit  

Common Stock Dividend Distributable  $40,000  Credit  

Paid in Capital in Excess of Par  $160,000  Credit  

At the moment of been distributed the additional shares to the stockholders the company register the following entry:    

Common Stock Dividend Distributable  $40.000  Debit  

Common Stock   $40.000  Credit  

Explanation:

When the company declares a stock dividend it does not involve cash, it means that each stockholder will get an additional percentage of shares.    

As the total value of stock it's the same, then the value per share decrease related to the price before the stock dividend because there are more shares outstanding.  

On December 31, 2018, the company's board of directors declares a 20 percent stock dividend.    

As the total shares outstanding are 100,000 , the stock dividend will be 20,000 more shares.  

The following entry is made on the declaration date:    

Retained Earnings ( 20,000 x $10)  $200.000  Debit  

Common Stock Dividend Distributable  $40.000  Credit  

Paid in Capital in Excess of Par  $160.000  Credit  

 

At the moment of been distributed the additional shares to the stockholders the company register the following entry:    

Common Stock Dividend Distributable  $40.000  Debit  

Common Stock   $40.000  Credit  

5 0
3 years ago
Read 2 more answers
Spacefood Products will pay a dividend of $ 2.25 $2.25 per share this year. It is expected that this dividend will grow by 3 3​%
gavmur [86]

Answer:

$32.14 per share

Explanation:

The computation of the current value of the single share is shown below:

= Current year dividend ÷ (Required rate of return - growth rate)

where,

Current year dividend is $2.25 per share

Required rate of return is 10%

And, the growth rate is 3%

So by placing these items, the current value is

= $2.25 ÷ (10% - 3%)

= $32.14 per share

7 0
2 years ago
Other questions:
  • Each Component (Services/Agencies) uses the guidance provided by the Planning phase of the Planning, Programming, Budgeting, and
    15·1 answer
  • Debit means increase and credit means decrease for all accounts. true false
    14·1 answer
  • Which of the following is NOT an example of a caught-in or caught-between hazard?
    8·2 answers
  • The rationing function of prices means that
    6·1 answer
  • Normally, most organizational objectives can be summarized as:
    10·1 answer
  • Which of the five competitive forces is influencing a passenger train line, when a new automobile manufacturer causes a reductio
    6·1 answer
  • An investor set up his own IRA several years ago and has now decided to get professional advice from an investment adviser. When
    12·1 answer
  • Anybody wanna be friends
    13·2 answers
  • MCQS
    9·1 answer
  • Match each type of insurance with an example of when the insurance
    13·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!