DIF 2 REF 16 3 NAT Analytic LOC Monopolistic competition TOP Advertising MSC

Dif 2 ref 16 3 nat analytic loc monopolistic

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DIF: 2 REF: 16-3 NAT: Analytic LOC: Monopolistic competitionTOP: Advertising MSC: Analytical1414 Chapter 16/Monopolistic Competition15. In markets where the government imposes an excise tax on unit sales, it also has a tendency todabble with restrictions on advertising (for example, cigarettes and hard liquor). Do potential (oractual) restrictions on advertising in these markets serve the interest of a government that isinterested in maximizing its tax revenue from the sale of these products? Explain your answer.ANS:In the case of the examples given, demand is quite inelastic, so restrictions on advertising are not likely tohave a large impact on total sales but may have an impact on the distribution of sales across brand names.As such, government revenue is largely unaffected if the tax is on unit sales.DIF: 3 REF: 16-3 NAT: Analytic LOC: Monopolistic competition
TOP: Advertising MSC: AnalyticalSec 00 - Monopolistic CompetitionMULTIPLE CHOICE 1. Which of the following is a characteristic of monopolistic competition? 2. The market for novels is 3. Which of the following statements is not correct? 4. Which of the following statements is not correct?

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