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Unformatted text preview: The correct answer is
Elasticity of demand is generally larger in the long run. If the elasticity of demand is perfect, the
seller bears the whole tax. If the elasticity of supply is perfect, then the buyer bears the whole burden
of the tax. Only statement III is correct. The correct answer is (C).
The elasticity of demand at P = 400 is 2/3. The correct answer is (D).
At Q = 100, the elasticity of demand is 3. The correct answer is (G).
Marginal revenue is dTR/dq, which can be calculated to be = P(1-[1/ED]). The...
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This note was uploaded on 06/11/2011 for the course ECMA 04 taught by Professor Cleverland during the Fall '09 term at University of Toronto- Toronto.
- Fall '09