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CIPS Exam A6 Topic 1 Question 46 Discussion

Actual exam question for CIPS's A6 exam
Question #: 46
Topic #: 1
[All A6 Questions]

According to economic theory, which of the following best describes what should happen to the sales of a product if the government increases the tax on them?

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Suggested Answer: C

by Tasia at Mar 10, 2024, 09:49 PM

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Gwenn
8 months ago
If the tax doubles, then the sales might significantly decrease, so I think the answer is B) The sales decrease.
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Youlanda
8 months ago
That's true, if the product is a necessity, the sales might not decrease as much.
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Charlie
8 months ago
But wouldn't it also depend on the demand for the product and how elastic it is?
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Erick
8 months ago
I agree with Youlanda, higher taxes usually lead to lower sales.
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Youlanda
9 months ago
If the government increases tax on a product, sales will probably decrease.
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Quinn
9 months ago
I believe the correct answer is B) The sales decrease because higher prices usually lead to lower demand.
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Dorthy
9 months ago
Even if it's a necessity, some people may still reduce their purchase due to higher prices.
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Elinore
9 months ago
But what if the product is a necessity? Would the sales still decrease?
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Narcisa
10 months ago
I agree with Dorthy, when the government increases tax, people are less likely to buy the product.
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Dorthy
10 months ago
I think the answer is B) The sales decrease.
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