Scenario 5-3
Suppose that the supply of aged cheddar cheese is inelastic,and the supply of bread is elastic.Both goods are considered to be normal goods by a majority of consumers.Suppose that a large income tax increase decreases the demand for both goods by 10%.
-Refer to Scenario 5-3.The price elasticity of supply for aged cheddar cheese could be
A) -1.
B) 0.
C) 0.5.
D) 1.5.
Correct Answer:
Verified
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