Business, 12.11.2019 06:31 lunbrooks

Suppose that at the dvd market price of $15, the price elasticity of dvd demand is 2.5 and the price elasticity of dvd supply is 0.8 (i. e., ed = 2.5 and es = 0.8 at pmkt = $15). if the government imposes a $4 per dvd excise tax on the production of dvds, then the consumers price will and the producers price will hint: illustrate the tax in a demand and supply graph.

a. increase by less than $2, decrease by more than $2 but less than $4.
b. decrease by less than $2, decrease by more than $2 but less than $4.
c. increase by more than $2 but less than $4, decrease by less than $2.
d. decrease by more than $2 but less than $4, increase by less than $2.
e. increase by more than $4, decrease by more than $4.
f. increase by less $2, decrease by less than $2.
g. not change, decrease by exactly $4.
h. increase by exactly $4, not change.

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Suppose that at the dvd market price of $15, the price elasticity of dvd demand is 2.5 and the price...

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