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Consider an excise tax that is similarly applied to good X, for which both the price elasticity of demand and the price elasticity of supply
Consider an excise tax that is similarly applied to good X, for which both the price elasticity of demand and the price elasticity of supply are 2.7, and to good Y, for which both price elasticity of demand and price elasticity ofsupply are 0.6. We can predict that the excess burden of this tax in the market for good X will be ________ the excess burden in the market for good Y.
a) Smaller than
b) Equal to
c) Larger than
d) No larger than
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