Help with this economic problem? Please?
lilou09us asked:
Consider four markets for luxury yachts, Markets A, B, C, and D. The demand for yachts in Market A is perfectly elastic. In Market B the price elasticity of demand, as an absolute value, is 3. In Market C the price elasticity of demand, as an absolute value, is 0.25. Finally, the demand for yachts in Market D is perfectly inelastic.
Consider four markets for luxury yachts, Markets A, B, C, and D. The demand for yachts in Market A is perfectly elastic. In Market B the price elasticity of demand, as an absolute value, is 3. In Market C the price elasticity of demand, as an absolute value, is 0.25. Finally, the demand for yachts in Market D is perfectly inelastic.
The elasticity of supply in all four markets is identical across every level of quantity. Answer the following questions.
7.2. If you wanted to lessen the efficiency costs of a specific government-imposed tax, upon which market would you impose the tax?
A. Market C
B. Market B
C. Market A
D. Market D
america yacht sales
Category: Yachting | Tags: Absolute Value, D Market, Economic Problem, Efficiency, Elasticity Of Demand, Elasticity Of Supply, Luxury Yachts, Price Elasticity Of Demand, Yacht Sales One comment »
December 29th, 2008 at 1:41 pm
D inelastic demand = no change in quantity after price in increased by tax, so no decline in social surplus