you are a usda economist, and the senate finance committee has come to you for advice. the government is considering bolstering its finances by imposing a tax on either salt or blue cheese. you know that the markets for salt and blue cheese are roughly the same size, though the demand for salt is highly inelastic, while the demand for blue cheese is highly elastic. which option do you recommend as the least costly choice? a tax on would be less costly, because the deadweight loss that occurs would be smaller due to the demand being relatively in this market.

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27-10-2022
Business

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you are a usda economist, and the senate finance committee has come to you for advice. the government is considering bolstering its finances by imposing a tax on either salt or blue cheese. you know that the markets for salt and blue cheese are roughly the same size, though the demand for salt is highly inelastic, while the demand for blue cheese is highly elastic. which option do you recommend as the least costly choice? a tax on would be less costly, because the deadweight loss that occurs would be smaller due to the demand being relatively in this market.

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A demand that is elastic experiences a significant change in quantity demanded as a result of a price change. When the amount demanded changes little as a result of a price change, the demand is said to be inelastic.

the government is considering bolstering its finances by imposing a tax on either salt.Though the demand for salt is highly inelastic.

What is highly elastic demand?

A demand that is elastic experiences a significant change in quantity demanded as a result of a price change. When the amount demanded changes little as a result of a price change, the demand is said to be inelastic. The demand is elastic if the formula generates an absolute value greater than.
A demand that is elastic experiences a significant change in quantity demanded as a result of a price change. When the amount demanded changes little as a result of a price change, the demand is said to be inelastic.
Formula for the Arc Price Elasticity of Demand. Luxury goods and consumer discretionary items, like a particular brand of cereal or candy bars, are typical examples of products with high elasticity.

To learn more about : Elasticity of Demand.

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