Suppose the Demand Curve for Movie Tickets Has Unitary Price

question 63

Multiple Choice

Suppose the demand curve for movie tickets has unitary price elasticity and the supply curve is perfectly price elastic.If 3 million tickets are currently sold at a price of $5,approximately how much tax revenue could the government generate from a $1 specific tax?

• A)$18 million
• B)$3 million
• C)$2.5 million
• D)$1.5 million

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Definitions:

Limited Time

A restricted period during which something can occur or must be completed.

Scarcity

Refers to the fundamental economic problem of having seemingly unlimited human wants and needs in a world of limited resources.

Freedom of Choice

The ability or right of individuals to make their own decisions without external constraints or coercion.

Emotional Response

The psychological reaction characterized by feelings such as happiness, anger, or fear, triggered by specific stimuli or events.