If the government places a $500 tax on luxury cars, will the price paid by consumers rise

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If the government places a $500 tax on luxury cars, will the price paid by consumers rise by more than $500, less than $500, or exactly $500? Explain.

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Principles of economics

ISBN: 978-0538453042

6th Edition

Authors: N. Gregory Mankiw

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Question Posted: Dec 14, 2012 06:50 AM

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If the government places a $500 tax on luxury cars, will the price paid by consumers rise

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Because a luxury car likely has an elastic demand the ...View the full answer

Principles of economics

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