Suppose the Demand Curve for a Good Is Downward Sloping

question 74

Multiple Choice

Suppose the demand curve for a good is downward sloping and the supply curve is upward sloping.At the market equilibrium,if demand is more elastic than supply in absolute value,a $1 specific tax will

• A) raise the price to consumers by 50 cents.
• B) raise the price to consumers by less than 50 cents.
• C) raise the price to consumers by more than 50 cents.
• D) raise the price to consumers by $1.

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Definitions:

Windows Operating System

A series of graphical operating systems developed, marketed, and sold by Microsoft.

Version

A specific form or variation of a product that is different from other forms of the same product or from previous iterations.

Variable Costs

Costs that change in proportion with the level of output or business activity, in contrast to fixed costs.

Profit per Unit

The difference between the selling price of a product and its cost per unit.