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

Price elasticity of supply — practice question

A product with infinite elasticity of supply sells 1000 units each week when the price is $1 per unit. Price elasticity of demand is 1.5 over the relevant range. The government introduces a tax of 10%. What is the government’s weekly tax revenue?

  • A$15
  • B$85
  • C$100
  • D$150

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