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Intermediate Microeconomics and Its Application 12th Edition by Walter Nicholson,Christopher Snyder
Edition 12ISBN: 978-1133189022Intermediate Microeconomics and Its Application 12th Edition by Walter Nicholson,Christopher Snyder
Edition 12ISBN: 978-1133189022 Exercise 17
How does the relationship between marginal revenue and price elasticity explain the following economic observations?
1. There are five major toll routes for automobiles from New Jersey into New York City. Raising the toll on one of them will cause total revenue collected on that route to fall. Raising the tolls on all of the routes will cause total revenue collected on any one route to rise.
2. A doubling of the restaurant tax from 3 percent to 6 percent only in Hanover, New Hampshire, causes meal tax revenues to fall in that town, but a state wide increase of a similar amount causes tax revenues to rise.
1. There are five major toll routes for automobiles from New Jersey into New York City. Raising the toll on one of them will cause total revenue collected on that route to fall. Raising the tolls on all of the routes will cause total revenue collected on any one route to rise.
2. A doubling of the restaurant tax from 3 percent to 6 percent only in Hanover, New Hampshire, causes meal tax revenues to fall in that town, but a state wide increase of a similar amount causes tax revenues to rise.
Explanation
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1) There are 5 major toll routes on the ...
Intermediate Microeconomics and Its Application 12th Edition by Walter Nicholson,Christopher Snyder
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