Answered: Demand for salt is nearly perfectly…

Demand for salt is nearly perfectly inelastic. If the government imposes a tax of 10% on salt what shall be the effect on quantity demanded of salt? Why?

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter5: Elasticity

Section: Chapter Questions

Problem 30CTQ: In a market where the supply curve is perfectly inelastic how does an excise tax affect the price...

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Question

Demand for salt is nearly perfectly
inelastic. If the government imposes
a tax of 10% on salt what shall be
the effect on quantity demanded of
salt? Why?

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