Suppose the supply curve of alcohol is horizontal and the demand curve is linear and downward sloping. The government wants to increase alcohol tax...
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Suppose the supply curve of alcohol is horizontal and the demand curve is linear and downward sloping. The

government wants to increase alcohol tax slightly. Government's tax revenue will increase only if the price elasticity of demand for alcohol is              at the neighborhood of the quantity before the tax increase.

Select one:

a. Elastic

b. Inelastic

c. Cannot be determined with the current information

d. Perfectly elastic

e. Unitary elastic

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