An ad valorem tax
A)is proportionate to the quantity of a good sold.
B)increases supply by shifting the curve up.
C)is a percentage tax on the total value of sales.
D)is a tax that is paid only by producers.
E)is a per-unit tax on a good.

Question

Quizplus · Accepted Answer

An ad valorem tax is a tax that is imposed as a percentage of the value of a good or service. It is not based on the quantity of goods sold or a per-unit tax. It is typically paid by the producer but can be passed on to the consumer in the form of higher prices. It does not affect the supply curve.

An Ad Valorem Tax