Assume the Supply Curve for Product X Is Perfectly Elastic

question 36

Multiple Choice

Assume the supply curve for product X is perfectly elastic and that government imposes a $2-per-unit excise tax. We can conclude that the resulting

• A) increase in output will be greater the less elastic the demand curve.
• B) decrease in output will be greater the less elastic the demand curve.
• C) decrease in output will be greater the more elastic the demand curve.
• D) increase in output will be greater the more elastic the demand curve.

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Definitions:

Supply Chain Strategy

The approach taken by a company to manage the flow of goods, information, and finances from the acquisition of raw materials to the delivery of the product to the end consumer.

Warehousing Functions

Activities related to the storage of goods in a warehouse such as receiving, storing, managing inventory, and preparing goods for distribution.

Push Strategy

A marketing strategy that aims to "push" products towards consumers through channels such as promotions and sales force efforts rather than creating demand through consumer interest.

Sustainable Sourcing

A process of purchasing goods and services that takes into account the long-term impact on people, profits, and planet.