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If the Government Desires to Raise a Certain Amount of Revenue

Question 76

Multiple Choice

If the government desires to raise a certain amount of revenue by taxing a monopoly,an ad valorem tax will


A) generate the same loss of consumer surplus as a specific tax.
B) generate a greater loss of consumer surplus than a specific tax.
C) generate a smaller loss of consumer surplus than a specific tax.
D) generate no loss of consumer surplus.

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