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

Price elasticity of demand — practice question

A product whose supply is infinitely elastic sells 1000 units each week at a price of $1 for each unit. Price elasticity of demand is 1.5 over the relevant range. The government introduces a tax of 10%. What will be the weekly tax revenue collected by the government?

  • A$15
  • B$85
  • C$100
  • D$150

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