The Price Elasticity of Demand for Lychee Fruit Is 1

question 250

Multiple Choice

The price elasticity of demand for lychee fruit is 1.3, while the price elasticity of supply is 0.7. The incidence of a $0.25 excise tax placed on lychee fruit will be

• A) higher for producers.
• B) higher for consumers.
• C) equal for producers and consumers.
• D) nonexistent for both producers and consumers.

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