Answer to Question #296648 in Economics for amy

Question

PED and PES with respect to a certain product is – 0.2 and 1.4 if the government impose a unit tax of Rs. 80 what would be the increase amount of price?

Answer 1

If the government impose a unit tax of Rs. 80, then the increase amount of price is a bit less than 80, but most part of this tax burden will pay the consumers.