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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.
Briefly discuss some of the services that international banks provide their customers and the market place. Answer: International banks can be categorized by the types of servic
The financial institutions that originate the loans sell a pool of cashflow-producing assets to a specially created third party that is called a
Cash flow statement analysis Cash flow statement is a primary financial statement and shows cash generating ability of the organisation. Cash generated from operations can b
State about the Manufacturing overseas or exporting Dyson (appliances manufacturer) relocated UK production to Malaysia in 2002 though still retained its head office within the
Q. What is Cost Recovery Method? Cost Recovery Method - METHOD OF REVENUE RECOGNITION that identifies profits after costs are entirely recovered. Normally used only when the to
At entity level - Inherent risk Integrity of management. Management's experience and knowledge Over reliance on key customers. Unusual pressures on management
Entity A is significantly smaller than B in terms of revenue and would not impact LOP's revenue to the same extent. However A earns a noticeably better gross profit margin at 26% a
evaluate the importance of leverage in financial management of a small scale company
Q. What do you mean by Misappropriation Of Fund? Misappropriation Of Funds allotted for specific works under capital or Revenue demand but the expenditure is incurred for anoth
Earn out arrangements Consideration could be delayed and paid only upon achievement of certain criteria. For illustration the predator company may pay additional cash if acq
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