Which of the following is true of distribution costs?
| Fewer middlemen lead to higher overall cumulative taxes on goods and higher distribution costs. |
| In countries where value-added tax is noncumulative, tax is paid only on the difference between the middleman’s cost and the selling price. |
| Shorter channels of distribution can help reduce the prices of final goods. |
| In a country where taxes on goods are cumulative, firms have an incentive to maintain longer channels of distribution. |
| Designing a channel that has fewer middlemen may increase distribution costs. |
