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1.3 Price determination in a competitive market

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Question 50

A government introduces a specific indirect tax of £5 per tonne on cement production. The market price paid by construction firms (consumers) will rise by exactly £5 if the price elasticity of:

Tax Incidence Diagram

demand is perfectly elastic.

supply is perfectly inelastic.

demand is perfectly inelastic.

supply is unit elastic.

1.3 Price determination in a competitive market Questions

  1. A Level
  2. /Economics
  3. /1.3 Price determination in a competitive market