Suppose an individual is selling a car and has a bottom line of $23,000. Also suppose that
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Question:
Suppose an individual is selling a car and has a “bottom line” of $23,000. Also suppose that another individual is looking to purchase a car, with a "top dollar" of $26,000.
A wealth-creating transaction is possible, since the seller's bottom line is less than or equal to or greater than the buyer's top dollar. The total surplus from such a purchase would be $
Suppose the government imposes a tax of $5,000 on the purchase of a car.
With this tax, the wealth-creating sale of the car between these two buyers will no longer or still take place.
Related Book For
Managerial accounting
ISBN: 978-0471467854
1st edition
Authors: ramji balakrishnan, k. s i varamakrishnan, Geoffrey b. sprin
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