Multiple Choice
If the price of gasoline in this country were expected to rise due to a permanent increase in the tax on gasoline, which of the following would you expect to happen?
A) The demand for gasoline would become more elastic.
B) The demand for gasoline would decrease as a result of the higher price.
C) Producers will have less of an incentive to supply gasoline as a result of the higher taxes.
D) The elasticity of demand will not change since gasoline is a necessary good.
Correct Answer:
Verified
Correct Answer:
Verified
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