Any tax relief received by the solar industry would not benefit the homeowner who installs a solar-energy system. Even though homeowners would pay a lower price for solar-energy system installations because of this tax relief, with the government paying the balance, government revenues come from the public.

The argument above is based on which of the following assumptions?

  1. The tax relief would cause the homeowner to lose, through taxes or reduced government benefits or both, an amount at least equal to the reduction in the price of that homeowner’s solar-energy system installation.
  2. The tax relief that would be received by solar-energy industries would not be offered at the same time as any tax relief for other industries.
  3. Advertisements of the solar-energy industry, by failing to identify the source of government revenues explicitly to the public, mask the advantage the industry receives from the public.
  4. Homeowners generally believe that they benefit from any tax relief offered to the solar-energy industry.
  5. Tax relief would encourage solar industries to sell solar-energy systems at higher prices.

Highlight to see answer: A

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