Suppose the Nunavut Government Decides to Repair Iqaluit Roads

question 40

Multiple Choice

Suppose the Nunavut government decides to repair Iqaluit roads. One way to generate sufficient funds for this plan is to increase taxes on gasoline. The government will be able to raise total revenue from gasoline sales only if the demand for gasoline is

• A)perfectly elastic.
• B)equal to the supply of gasoline.
• C)unit elastic.
• D)inelastic.
• E)elastic.

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