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

question 280

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.

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Definitions:

Expected Flow

An estimation of the quantity of a commodity, cash, or traffic moved in a certain direction over a given period.

Future Productive

The potential or capacity for increased production or efficiency in the future, often influenced by investments in technology, education, or infrastructure.

Investment Project

A project involving the allocation of capital resources to assets that are expected to yield returns over time, often evaluated for its potential profitability.

Market Interest Rates

The prevailing rate at which borrowers are willing to borrow money and lenders are willing to lend in the open market.