Suppose the Demand Curve for Movie Tickets Has Unitary Price

question 5

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) $2.7 million
• D) $1.5 million

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