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stars_and_moon stars_and_moon
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7 years ago
The elasticity of demand for airplane tickets is 0.5, and the elasticity of supply is 2.5. If the government put a tax on airplane tickets, which of the following is true?
A) Consumers will have the higher tax incidence since demand is more inelastic than supply.
B) Producers will have the higher tax incidence since supply is more inelastic than demand.
C) Consumers will have the higher tax incidence since demand is more elastic than supply.
D) Producers will have the higher tax incidence since supply is more elastic than demand.
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kingbykingby
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#1
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7 years ago
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#2
7 years ago
Perfectly answered Smiling Face with Open Mouth

Cheers
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#3
7 years ago
I instantly knew the answer when I read the question, happy to help
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