If the Demand for a Product Is Perfectly Elastic and Supply

question 67

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 $1.
• D) raise price by more than $1.

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Definitions:

Honest Mistake

An error made in good faith without the intention to deceive or cause harm.

Liability For Mistake

A legal principle that holds parties accountable for errors that result in a breach of contract or harm to another party.

Personal Liability

The legal responsibility of an individual to assume financial obligations or compensate for wrongful acts.

Uniform Partnership Act

Legislation adopted by various states in the U.S. to provide a consistent legal framework governing the operation of partnerships.