Answer
a. small elasticities of demand and small elasticities of supply
Work Step by Step
If the elasticities are small, the increased prices and costs will not shrink the market as much.
Principles of Macroeconomics 7th Edition
by Mankiw, N. Gregory
Published by
South-Western College
ISBN 10:
1-28516-591-8
ISBN 13:
978-1-28516-591-2
Chapter 8 - Application: The Costs of Taxation - Quick Check Multiple Choice - Page 169: 6
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