Question

Two states, A and B, have the same sales tax rate. State A has decided to reduce its sales tax, but state B does not. Assuming that consumers are mobile, the consumers in state B will gain as a result of state A's decision.

True

False

Answer 1

We need to prepare a statement 1.Comparing cost analyis regarding bringing the product from state A to B and with 2.Accquring the product in State B directly.

We need to consider all the costs of bringing upon the product like frieght,tolls,packing, transporatation ,etc while preparing the statement as said above and the decision can be taken accordingly will it benefit the consumers of State B or not.

Assuming here all the above costs and conditionds are same for the first and second criterias reduction of tax in State A will be a benefit to State B consumers.