Question
The local government is considering imposing a revenue-neutral case) 6.25% tax on either tanning beds or soft drinks. Tanning has an elasticity of demand =
The local government is considering imposing a revenue-neutral case) 6.25% tax on either tanning beds or soft drinks. Tanning has an elasticity of demand = Ea = -0.9.while soft drinks ed = -0.7. Assume the supply curves have the same elasticity: from an economist's perspective, which good should be taxed and why
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Managerial Economics and Organizational Architecture
Authors: James Brickley, Clifford W. Smith Jr., Jerold Zimmerman
6th edition
73523143, 73523149, 978-0073523149
