In what type of analysis could an increase in the tax rate lead to a decrease in tax revenues?

Suppose that each worker must use only one shovel to dig a trench, and shovels are useless by themselves. In the long run, the firm will experience

A) increasing returns to scale. B) constant returns to scale. C) decreasing returns to scale. D) The returns to scale cannot be determined from the information provided.

The value of price elasticity of demand is more likely to be above 1 if:

a. consumers have a long time to adjust to a price change. b. the product is a necessity. c. demand is inelastic. d. there are few close substitutes for the product. e. total revenue declines in response to a price reduction.