If the Elasticity of Demand for a Product Equals 3

question 66

Multiple Choice

If the elasticity of demand for a product equals 3 and the supply is perfectly elastic,then if a tax is imposed on this product,

• A) the buyer pays all the tax.
• B) the seller pays all the tax.
• C) the buyer pays 3/4 of the tax.
• D) the seller pays 3/4 of the tax.
• E) the buyer pays 4/3 of the tax.

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Definitions:

Financial Statement Data

This refers to the quantitative information contained in the financial statements of a company, including the balance sheet, income statement, and cash flow statement, used for analysis.

Equity Offerings

The sale of equity or shares in a company to raise capital, usually through public offerings or private placements.

Debt Offerings

A way for companies to raise capital by issuing debt securities or bonds to investors, who in return receive interest payments.

Ultimate Return

The total return received from an investment, including all sources of income and capital gains, over the entire holding period.