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Econ 102 Midterm

Question:
Suppose the price elasticity of demand for yachts equals 4.04, while the price elasticity of supply for yachts equals 0.22. If Congress reinstates a luxury tax on yachts, who will pay more of the tax?
Answer:
Yacht builders will pay more
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Last update by jdiem1852 on 04/05/2011
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Econ 102 Midterm
Econ 102 Midterm
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Question: Suppose the price elasticity of demand for yachts equals 4.04, while the price elasticity of supply for yachts equals 0.22. If Congress reinstates a luxury tax on yachts, who will pay more of the tax?
Answer: Yacht builders will pay more