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    A government imposes an indirect tax on a product. The price of the product is likely torise by the full amount of the tax if the price elasticity of
    A supply is perfectly elastic.
    B supply is perfectly inelastic.
    C demand is unit elastic.
    D demand is perfectly elastic.

    Then answer is A but I don't get why? Shouldn't it be B, because then the price can rise without the quantity supplied changing? And if the supply is perfectly elastic, shouldn't there be no supply if the price rises?

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    http://www.policonomics.com/wp-conte...s-long-run.jpg
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    Ooooh I get it now, thanks!!!
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    np im doing the exam tommorow as well, hope i can get an A <<.
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    (Original post by whydoidothis?)
    np im doing the exam tommorow as well, hope i can get an A <<.
    Me too, good luck!!
 
 
 

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