Suppose the government imposes a $4 per month excise tax on cable TV.If the demand for cable TV is perfectly inelastic and the supply curve is elastic (but not perfectly elastic) ,then the price of cable TV will:
A) increase by more than $4.
B) increase by exactly $4.
C) increase by less than $4.
D) remain constant.
Correct Answer:
Verified
Q18: Use the following to answer question:
Q19: Use the following to answer question:
Q20: The incidence of a tax:
A)is a measure
Q21: The burden of a tax on a
Q22: If the demand curve is downward-sloping and
Q24: Determining who actually pays the cost imposed
Q25: Tax incidence refers to:
A)who writes the check
Q26: State governments levy excise taxes on cigarettes
Q27: If demand is perfectly inelastic and the
Q28: Prior to any taxes,the equilibrium price of
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