An ad valorem tax
A) Is a fixed dollar amount that must be paid on each unit bought or sold
B) Is a tax that is stated as a percentage of the good's price
C) Is a tax that is stated as a percentage of the good's price, which increases as quantity bought increases
D) Is a tax that is only paid by producers

Question

Quizplus · Accepted Answer

An ad valorem tax is a tax that is stated as a percentage of the good's price, and not a fixed dollar amount. The tax amount will increase or decrease as the price of the good changes.

An Ad Valorem Tax