For a Given Supply Curve, How Does the Elasticity of Demand

question 95

Multiple Choice

For a given supply curve, how does the elasticity of demand affect the burden of a tax imposed on a product?

• A)The excess burden of the tax will be minimised when the demand is unit-elastic.
• B)The excess burden of the tax will be greater when the elasticity of supply is greater than the elasticity of demand.
• C)The excess burden of the tax will be greater when the demand is less elastic than when it is more elastic.
• D)The excess burden of the tax will be greater when the demand is more elastic than when it is less elastic.

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Investors who attempt to profit from market volatility by buying and selling stocks or other financial instruments, often taking higher risks.

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