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Suppose a Market Is in Equilibrium at Price P0, and Then

Question 119

Multiple Choice

Suppose a market is in equilibrium at price P0, and then an excise tax of t dollars per unit of the good is imposed. At a price of (P0 + t) there will be excess for the good unless the demand curve is .


A) supply; vertical
B) demand; horizontal
C) demand; vertical
D) tax; unit elastic
E) supply; horizontal

Correct Answer:

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