Scenario 5-2 The Supply of Cheese Is Inelastic,and the Supply of Bread

question 43

Multiple Choice

Scenario 5-2
The supply of cheese is inelastic,and the supply of bread is elastic.Both goods are considered to be normal goods by a majority of consumers.Suppose that a large income tax increase decreases the demand for both goods by 10%.
-Refer to Scenario 5-2.The change in equilibrium price will be

• A)greater in the cheese market than in the bread market.
• B)greater in the bread market than in the cheese market.
• C)the same in the cheese and bread markets.
• D)Any of the above could be correct.