If the Supply of a Product Is Perfectly Elastic and Demand

question 251

Multiple Choice

If the supply of a product is perfectly elastic and demand is downsloping, an excise tax of $2 per unit will increase price by

• A)more than $2.
• B)less than $2.
• C)$2 and increase equilibrium output.
• D)$2 and reduce equilibrium output.

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Definitions:

Cultural Products

Objects, symbols, or practices that possess particular meaning within a culture, including literature, art, music, and traditions.

Social Norms

Shared guidelines or rules within a group or society about how to behave, which can influence an individual's behavior.

Cultural Liabilities

Drawbacks or disadvantages associated with belonging to a certain culture, especially when interacting in a broader or different cultural context.

Propaganda

Information, especially of a biased or misleading nature, used to promote or publicize a particular political cause or point of view.