Question

3doc When demand is perfectly a sales tax will elastic; increase the after-tax price by the amount of the tax. elastic; not c
0 0
Add a comment Improve this question Transcribed image text
Answer #1

B.

Elastic

Not change in the price of the good.

Explanation:

Because demand curve is perfectly elastic, the consumers are very sensitive to the price.

The whole burden of the tax is on the producers.

i.e if any tax is there then it's burden will be completely on the producers. They cannot increase the price of the product, which will harm the quantity demanded. In a market with perfectly elastic demand curve when price is increased the demand of the good will be zero. Hence,

There will be no change in the price of the good.

perfectly elastic / horizontal Demand curve

Add a comment
Know the answer?
Add Answer to:
3doc When demand is perfectly a sales tax will elastic; increase the after-tax price by the...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
  • Suppose that the demand for apples is perfectly elastic and the government levies a tax on...

    Suppose that the demand for apples is perfectly elastic and the government levies a tax on the producers of apples. Assume that the supply of apples is neither perfectly elastic nor perfectly inelastic. 1. How will the price paid by consumers change? Is this change bigger or smaller than the price change that would result if the demand for apples were not perfectly elastic? 2. How will the quantity of apples consumed change because of the tax? Is this change...

  • Refer to Figure 5-1. A perfectly elastic demand curve is shown in Panel D. Panel A. Panel C...

    Refer to Figure 5-1. A perfectly elastic demand curve is shown in Panel D. Panel A. Panel C. Panel B. Refer to Figure 5-5. The data in the diagram indicates that DVDs are luxury goods. are both luxury goods and price inelastic goods. are price inelastic goods. are both necessities and price inelastic goods. are necessities. 3- Consider the following pairs of items:   a. shampoo and conditioner b. iPhones and earbuds c. a laptop computer and a desktop computer d....

  • 9.The more time people have to adjust to a price change, A.the less elastic their demand...

    9.The more time people have to adjust to a price change, A.the less elastic their demand will be. B. will not affect the elasticity of their response, unless the good in question is a luxury good. C.the more elastic their demand will be. D.will not affect the elasticity of their response, unless the good in question is a necessity. 10.When a good has many close substitutes available, its demand is likely to be A.less price elastic than for goods without...

  • Price (dollars per unit) 10- 8- When the price is $4 a unit, demand is perfectly...

    Price (dollars per unit) 10- 8- When the price is $4 a unit, demand is perfectly elastic. Draw the demand curve for this good. Label it D. When the quantity demanded is 3 million units a year, demand is perfectly inelastic Draw the demand curve for this good. Label it D2. When the price is $8 a unit, the quantity demanded is 1 million units a year, and demand is unit elastic. Draw the demand curve for this good. Label...

  • Elastic demand implies that a one percent increase in price results in a larger than one...

    Elastic demand implies that a one percent increase in price results in a larger than one percent decrease in quantity demanded. that a one percent decrease or increase in price induces no change in total revenue. that a one percent increase in price results in a smaller than one percent decrease in quantity demanded. that a one percent cut in price results in a larger than one percent increase in quantity demanded. Question 4 (1 point) A perfectly elastic demand...

  • Price Elasticity of Demand: Naturally Good Organics Price Elasticity of Demand measurers how changed in a...

    Price Elasticity of Demand: Naturally Good Organics Price Elasticity of Demand measurers how changed in a price affect the quantity of the product demanded. Specifically, it is the ratio of the percentage change in quantity demanded to the percentage change in price. In order to understand how to plan a successful pricing program, marketers must understand how elastic or inelastic the consumers are to changes in price. In other words, to what extent will a price increase or decrease result...

  • 15.Demand tends to be more elastic when A. price is high, and more inelastic when price...

    15.Demand tends to be more elastic when A. price is high, and more inelastic when price is low. B. price is low, and more inelastic when price is high. C. the demand curve is very steep. D. the quantity demanded is larger. 16.If increasing the admission charge for National Parks increases the National Park Service’s total revenue, then the demand for National Park visits is A.inelastic. B.elastic, but not perfectly elastic. C.perfectly elastic. D.a perfectly horizontal line. 20. When consumers’...

  • Price Elasticity of Demand: AWAKE Price Elasticity of Demand measurers how changed in a price affect...

    Price Elasticity of Demand: AWAKE Price Elasticity of Demand measurers how changed in a price affect the quantity of the product demanded. Specifically, it is the ratio of the percentage change in quantity demanded to the percentage change in price. In order to understand how to plan a successful pricing program, marketers must understand how elastic or inelastic the consumers are to changes in price. In other words, to what extent will a price increase or decrease result in changes...

  • Price Elasticity of Demand: Chippers Cookie Bakery Price Elasticity of Demand measurers how changed in a...

    Price Elasticity of Demand: Chippers Cookie Bakery Price Elasticity of Demand measurers how changed in a price affect the quantity of the product demanded. Specifically, it is the ratio of the percentage change in quantity demanded to the percentage change in price. In order to understand how to plan a successful pricing program, marketers must understand how elastic or inelastic the consumers are to changes in price. In other words, to what extent will a price increase or decrease result...

  • ​​A good is considered normal when its income elasticity of demand is  ___ and inferior when the...

    ​​A good is considered normal when its income elasticity of demand is  ___ and inferior when the its income elasticity of demand is ___. ​Greater than zero, less than zero. ​Less than zero, greater than zero. ​Greater than one, less than one. ​Less than one, greater than one. If an increase in prices decreases total revenue in the short run, what will it do to total revenue in the long run? ​It will decrease total revenue in the long run. ​It...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT