Multiple Choice
Assume that the demand for diamonds is more elastic than the demand for gasoline.What happens to the consumer surplus if the same percentage tax is levied on both products
A) The loss of consumer surplus is relatively small for diamonds.
B) The loss of consumer surplus is relatively large for diamonds.
C) The gain of consumer surplus is relatively small for diamonds.
D) The gain of consumer surplus is relatively large for diamonds.
Correct Answer:
Verified
Correct Answer:
Verified
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