The government prefers an ad valorem tax to a specific tax that reduces the monopoly output by the same amount because
A) consumers are not harmed by the ad valorem tax.
B) the monopoly prefers the ad valorem tax.
C) consumers prefer the ad valorem tax.
D) the ad valorem tax transfers more revenue from the monopoly to the government.
D
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Jim bought a new bike and rides it every day, while his old one sits in the garage untouched. Jim’s opportunity cost of keeping the old bike is:
A. nothing, since he doesn't really value it anymore. B. whatever he could sell it for. C. whatever he would be willing to sell it for. D. All of these are true.
Higher nominal interest rates ________ the amount of money demanded and a higher price level ________ the amount of money demanded.
A. increase; decreases B. increase; increases C. decrease; decreases D. decrease; increases