If the Demand for a Product Is Perfectly Inelastic and the Supply

question 24

Multiple Choice

If the demand for a product is perfectly inelastic and the supply curve is upsloping, a $1 excise tax per unit of output will

• A) raise the price by less than $1.
• B) raise the price by more than $1.
• C) raise the price by $1.
• D) lower the price by $1.