Assume That the Elasticities of Supply and Demand in an Industry

question 112

Multiple Choice

Assume that the elasticities of supply and demand in an industry are both equal to 2 and that it is currently untaxed. A new tax imposed on the industry will:

• A)​be borne more by suppliers than demanders.
• B)​be borne more by demanders than suppliers.
• C)​be borne equally by demanders and suppliers.
• D)​not raise any added revenue for the government since demand is relatively elastic.

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Definitions:

Nok Style

Pertains to the distinctive terracotta sculptures associated with the ancient Nok culture of Nigeria, dating back to between 500 BC and 200 AD.

Illegal Market

A marketplace where goods or services are exchanged illegally, either because they are prohibited by law or sold without authorization or regulation.

Benin Brass Plaque

Metal castings traditionally made in Benin City, Nigeria, depicting the royal court and other figures, celebrated for their historical and artistic significance.

Symmetrical

Characterized by having parts that match each other in size, shape, and position on opposite sides of a dividing line or around a central point, creating a sense of balanced proportions.