The world market price of cars in country Y stands at US$10 000. At this price, domestic car producers provide 100 000 cars to the market, while domestic consumers buy 200 000 cars. The government of country Y introduces a 10% tariff on imported cars. Under what conditions would this tariff generate the greatest revenue for the government?
- Aprice elasticity of supply of car producers in country Y +0.5; price elasticity of demand for cars in country Y -0.5
- Bprice elasticity of supply +0.5; price elasticity of demand -1.5
- Cprice elasticity of supply +1.5; price elasticity of demand -0.5
- Dprice elasticity of supply +1.5; price elasticity of demand -1.5