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Suppose the Government Imposes a $4 Per Month Excise Tax

Question 55

Essay

Suppose the government imposes a $4 per month excise tax on cable TV.If the demand for cable TV is relatively inelastic and the supply curve is relatively 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:

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increase b...

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