2. When the elasticity of demand is equal to the elasticity of supply, the price of a
commodity on which a specific tax is imposed will rise by :
(A) More than fifty per cent of the amount of tax per unit
B Half the amount of tax per unit
(C) Full amount of the tax per unit
(D) Less than fifty per cent of the amount of tax per unit.
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Answer:
When the elasticity of demand is equal to the elasticity of supply, the price of a commodity on which a specific tax is imposed will rise by:
B Half the amount of tax per unit
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