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

Price elasticity of demand — practice question

For a product whose supply is infinitely elastic, weekly sales are 1000 units when the price is $1 per unit. Price elasticity of demand is 1.5 across the relevant range. The government introduces a tax of 10%. What will be the government’s weekly tax revenue?

  • A$15
  • B$85
  • C$100
  • D$150

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