Which of the following is not a way that a corporate tax on the income of U.S. car companies will affect markets?
A)The price of cars will rise.
B)The wages of auto workers will fall.
C)Owners of car companies (stockholders) will receive less profit.
D)Less deadweight loss will occur since corporations are entities and not people who respond to incentives.

Question

Quizplus · Accepted Answer

Corporate taxes can lead to deadweight loss because they distort market incentives, affecting production and consumption decisions. Corporations, though entities, are run by people who respond to incentives.

Which of the Following Is Not a Way That a Corporate