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    ECON Micro 2
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    Exam 5: Elasticity of Demand and Supply
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    A New Tax on Beer Will Increase the Price of Beer
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A New Tax on Beer Will Increase the Price of Beer

Question 8

Question 8

Multiple Choice

A new tax on beer will increase the price of beer by 35%,As a result,the quantity demanded of beer will decrease by 25%.Then,the demand for beer is:


A) Elastic
B) Inelastic
C) Unit elastic
D) Perfectly elastic
E) Perfectly inelastic

Correct Answer:

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