MANAGEMENT

Detailed explanation-1: -Excise taxes are taxes required on specific goods or services like fuel, tobacco, and alcohol. They are primarily taxes that must be paid by businesses, usually increasing prices for consumers indirectly. Excise taxes can be ad valorem (paid by percentage) or specific (cost charged by unit).

Detailed explanation-2: -"Tax incidence” (or incidence of tax) is an economic term for understanding the division of a tax burden between stakeholders, such as buyers and sellers or producers and consumers. Tax incidence can also be related to the price elasticity of supply and demand.

Detailed explanation-3: -The correct answer is option c, federal income tax. The ability to pay principle calls for the total tax burden to be well distributed among the individuals and follow their capability to bear. Federal income tax brackets are differently defined in different countries and apply to higher-income earners.

Detailed explanation-4: -Because the consumer is elastic, the consumer is very sensitive to price. A small increase in price leads to a large drop in the quantity demanded. The imposition of the tax causes the market price to increase from P without tax to P with tax and the quantity demanded to fall from Q without tax to Q with tax.