One reason why soda companies are so fervently against this tax might be because they assume sellers will pay the entire tax. Sellers will pay the entire tax if
A) demand is perfectly inelastic.
B) the price elasticity of demand is between zero and 1.
C) demand is unit elastic.
D) demand is perfectly elastic.
D
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Lionfish is an aquatic invasive species in the southeastern U.S. and the Caribbean. Current removal policies focus on harvesting the lionfish for human consumption. However, a fishing license is required to fish in most southern states. Assume the supply of fishing licenses is Qs = 50 + 0.05L + 40P, where L = lionfish population and P = price of a fishing license, and the demand for fishing
licenses is Qd = 1400 – 60P. What is the equilibrium price and quantity of fishing licenses when L = 1,000? A) P = $8.5, Q = 890 B) P = $13, Q = 620 C) P = $13.5, Q = 590 D) P = $13.5, Q = 591