Assume That the Demand for Diamonds Is More Elastic Than

question 134

Multiple Choice

Assume that the demand for diamonds is more elastic than the demand for gasoline.What happens to the consumer surplus if the same percentage tax is levied on both products

• A)The loss of consumer surplus is relatively small for diamonds.
• B)The loss of consumer surplus is relatively large for diamonds.
• C)The gain of consumer surplus is relatively small for diamonds.
• D)The gain of consumer surplus is relatively large for diamonds.

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Definitions:

Negative

Generally refers to a detrimental condition or quality, but in marketing, it can relate to negative feedback or perceptions that impact brand reputation.

Distinctive Characteristics

Unique features or qualities of a product, service, or entity that set it apart from its competitors.

Societal Rules

The norms and laws governing behavior within a society, which can influence individual and group actions and decisions.

Retailer

A company that sells goods to consumers for their use, rather than for resale to others.