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corie corie
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6 years ago
A few years ago, the city of Seattle, Washington, considered imposing a specific tax on all espresso-based coffee drinks sold in the city.  The extra tax revenue generated would have been used to fund after-school programs for low-income children.  The coffee-house owners (firms) agreed that this would be a good program to fund, but they argued that the tax would sharply reduce their sales volume and they would pay most of the tax burden.  This claim is true if:
A) the demand for espresso-based coffee is more inelastic than supply.
B) the demand for espresso-based coffee is more elastic than supply.
C) there are no close substitutes for espresso-based coffee drinks.
D) espresso-based coffee drinks can be produced at constant marginal cost.
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Microeconomics

Microeconomics


Edition: 8th
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boransalboransal
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6 years ago
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