A study of New York City (NYC) tax rates concluded that taxes on the nonmanufacturing sector should be higher since that sector has fewer alternatives.Manufacturers are more mobile and may move to avoid higher taxes.This means that
A)nonmanufacturing firms have a more elastic demand for NYC locations.
B)manufacturing firms have an inelastic demand for the NYC locations.
C)nonmanufacturing firms have relatively inelastic demand for the NYC locations.
D)nonmanufacturing demand for NYC locations is perfectly elastic.

Question

Quizplus · Accepted Answer

Nonmanufacturing firms have fewer alternatives and are less likely to move, indicating they have a relatively inelastic demand for NYC locations.

A Study of New York City (NYC) Tax Rates Concluded