If the Demand for a Product Is Perfectly Elastic, a Tax

question 59

Multiple Choice

If the demand for a product is perfectly elastic, a tax of $1 per unit imposed on sellers will

• A)increase the market price by $1 per unit.
• B)increase the market price by less than $1 per unit.
• C)decrease the market price by $1 per unit.
• D)decrease the market price by less than $1 per unit.
• E)not affect the market price.

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Definitions:

Fast-Twitch Fibers

Muscle fibers that contract quickly and are used for short bursts of speed and power, but fatigue more rapidly than slow-twitch fibers.

Skeletal System

The framework of bones and cartilages that supports the body, protects internal organs, and facilitates movement.

Photoreceptors

Specialized cells found in the retina of the eye that convert light into electrical signals, facilitating vision.

Retina

A layer at the back of the eyeball containing cells that are sensitive to light and that trigger nerve impulses that pass via the optic nerve to the brain, where a visual image is formed.