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Why does a tax create a deadweight loss? What determines the size of this loss?
A tax makes deadweight loss by artificially increasing price above the free market level, so decreasing the equilibrium quantity. This reduction in demand decreases consumer also producer surplus. The size of the deadweight loss depends upon the elasticities of supply and demand. Since the elasticity of demand increases and the elasticity of supply decreases, that is as supply becomes more inelastic, the deadweight loss becomes larger.
a choice is to be made between the two completing proposal which require an equal investment of Rs.50000.00 and we are expected t gererate net cash flow as under. Year Project A
Q. Explain about receivables management? Receivable Management: - The term receivables demote to debt owed to the firm by the customers resulting from sale of goods or else ser
Q. Observation of capital structure? Droxfol Co has long-term funding provided by ordinary shares preference shares and loan notes. The rate of return necessary by each source
Cyclical Variation By cyclical variations, we refer to the long-term movement of the variable about the trend line. Therefore, does the movement of the actual series about a tr
dear, I found an exercise on the Internet which could help me has better to understand the finance, but there were no answers. What is that you can help me has to solve it. I''m fr
How do financial managers calculate the average tax rate? Financial managers calculate the average tax rate by dividing tax dollars paid by earnings before taxes (EBT).
Q. What is Translation risk? This risk occurs on consolidation of financial statements prior to reporting financial results and for this reason is as well known as accounting e
The IASB is in the procedure of undertaking a comprehensive review of accounting for financial instruments, and has issued a latest financial instruments standard referred to as IF
Q. Explain about Death Benefit? Death Benefit - Amounts received under a life insurance contract and paid by reason of death of the insured. (Even though most death benefits ar
List the benefits of the flexible exchange rate regime. Answer: The benefits of the flexible exchange rate system include: a) Automatic attainment of balance of payments eq
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