Question: Suppose that the demand for digital picture frames is price elastic and the supply of digital picture frames is price inelastic. By what amount will
Suppose that the demand for digital picture frames is price elastic and the supply of digital picture frames is price inelastic. By what amount will a tax of $1.00 per frame levied on buyers of picture frames increase the equilibrium price paid by buyers of picture frames?
| a. | by less than $0.50 | |
| b. | by more than $0.50 but less than $1.00 | |
| c. | by $1.00 | |
| d. | by more than $1.00 |
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