The government of Healthyland imposes a tax on sellers of salt. The tax is $0.10 per pound. With no tax, the market price of salt is $0.40 per pound. The demand for salt is perfectly inelastic, and the elasticity of supply is 1.5. With the tax, the price that sellers of salt in Healthyland receive and keep is
A) $0.40 per pound.
B) $0.35 per pound.
C) $0.45 per pound.
D) $0.50 per pound.
Correct Answer:
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