Franchise Tax and Inelastic Demand. Assume the supply of sewer and water services in the City of Portland can be described as:
where Q is thousands of homes served per month with sewer and water service, and P is the price per month. Also assume that sewer and water service demand is perfectly inelastic at a quantity of 25(000). This means that the sewer and water demand curve can be drawn as a vertical line that passes through 25(000) on the X-axis.

Question

Franchise Tax and Inelastic Demand. Assume the supply of sewer and water services in the City of Portland can be described as:
  where Q is thousands of homes served per month with sewer and water service, and P is the price per month. Also assume that sewer and water service demand is perfectly inelastic at a quantity of 25(000). This means that the sewer and water demand curve can be drawn as a vertical line that passes through 25(000) on the X-axis.

Quizplus · Accepted Answer

The Answer of Franchise Tax and Inelastic Demand. Assume the supply of sewer and water services in the City of Portland can be described as:
  where Q is thousands of homes served per month with sewer and water service, and P is the price per month. Also assume that sewer and water service demand is perfectly inelastic at a quantity of 25(000). This means that the sewer and water demand curve can be drawn as a vertical line that passes through 25(000) on the X-axis.