If the Demand for a Product Is Perfectly Elastic and Supply

question 229

Multiple Choice

If the demand for a product is perfectly elastic and supply is upsloping, a $1 excise tax per unit on suppliers will

• A) not raise price at all.
• B) lower price by $1.
• C) raise price by more than $1.
• D) raise price by $1.

---

Definitions:

Gravel Dust

Fine particles produced from the crushing or erosion of gravel, commonly encountered on unpaved roads or during construction activities.

API GL-5

a classification of lubricants set by the American Petroleum Institute for high-pressure gear oils, commonly used in vehicle differentials and transmissions.

Differential Carriers

The housing that contains the differential in a vehicle, supporting the differential gears and enabling the distribution of power to the wheels.

Hypoid Gearsets

Hypoid Gearsets are used in the differential of vehicles, characterized by gears that engage at angles to each other, which allows for smoother and quieter operation than traditional gear systems.