A product with perfectly elastic supply has sales of 100 units per week at a price of £2 per unit. Price elasticity of demand is(-)1 .5 over the relevant range. The government imposes a tax 20%. What will be the government’s weekly tax revenue?
£28
JI
Related Economics A Level answers
All answers ▸Explain the 'Economic Problem' and how this closely links to the principles of demand and supply and how this ultimately determines the price of goods.
Microeconomics: Discuss the Benefits of a Minimum Wage?
How do I explain what effect an increase in government spending may have on unemployment and inflation in an economy?
Evaluate the view that a reduction in UK unemployment is best achieved through the use of supply-side policies.