Economics 9708 · AS & A Level · Income elasticity of demand

Income elasticity of demand — practice question

The diagram illustrates the demand and supply curves for a commodity before a particular tax is abolished and after it is abolished. What is the tax per unit of output, and what is the price once the tax has been removed?

  • Atax per unit 6; price after removal 6
  • Btax per unit 6; price after removal 8
  • Ctax per unit 4; price after removal 6
  • Dtax per unit 4; price after removal 8

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