a) What is the effect of a N$1 specific tax on equilibrium price and quantity if demand
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a)What is the effect of a N$1 specific tax on equilibrium price and quantity if demand is perfectly inelastic?[4 marks]
The coconut oil demand function is = 1500 8.5 + 14.2 + 0.3. Assume that p is initially N$0.55 per kg, = $0.91 per kg and Q=1575 thousand metric tons per year. Calculate income elasticity of demand coconut oil.
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