The Price Elasticity of Demand for a Particular Cancer Drug

question 188

Multiple Choice

The price elasticity of demand for a particular cancer drug is zero and the price elasticity of supply is 0.50.If a $1 excise tax is levied on producers,how much of this tax will eventually be paid by consumers?

• A)$0
• B)$1
• C)$0.50
• D)$1.50

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Definitions:

Prepaid Rent Expense

An account representing rent payments made in advance for future periods, which is gradually expensed over the benefit period.

Contra-Asset

An asset account where the balance is expected to be a debit balance but is instead a credit balance, such as accumulated depreciation.

Worksheet

A spreadsheet used by accountants to prepare adjusting entries, financial statements, and to ensure the accounts balance before closing.

Accountant

A professional who performs accounting functions such as audits or financial statement analysis and is proficient in financial reporting and regulation.