At the Equilibrium Price of $10, the Elasticity of Demand

question 9

Multiple Choice

At the equilibrium price of $10, the elasticity of demand and supply are -0.9 and 1.10. If the government institutes a tax of $1 per unit, sellers will receive _____ and consumers will pay _____.

• A) $9.55; $10.55
• B) $10.25; $11.25
• C) $9.80; $10.80
• D) $9.75; $10.75

---

Definitions:

Statute of Frauds

A legal principle requiring certain types of contracts to be written and signed to be enforceable.

Merger Clause

A contract provision that states the written contract represents the complete and final agreement between the parties, superseding all prior negotiations.

Parol Evidence Rule

A legal principle that prevents parties in a contract dispute from presenting evidence of prior or contemporaneous oral agreements that would contradict the written terms of the contract.

Writing Requirement

A legal principle that certain agreements or contracts must be in writing to be legally binding, especially relevant in real estate transactions and contracts that cannot be performed within one year.