Suppose That the Demand for Lava Lamps Is Elastic,and the Supply

question 448

Multiple Choice

Suppose that the demand for lava lamps is elastic,and the supply of lava lamps is inelastic.A tax of $2 per lamp levied on lava lamps will increase the price paid by buyers of lava lamps by

• A) less than $1.
• B) $1.
• C) between $1 and $2.
• D) $2.

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