If supply and demand are neither perfectly elastic nor inelastic (i. e. supply slopes upward and demand slopes downward), what will be the effect of a tax of $10 on the market for luxury purses that sell for $500? A. The market price of purses will increase but by less than $510 because consumers and producers will share the tax burden B. The market price of purses will not increase (it will remain at $500) since the tax was placed on producers only. C. The market price of purses will increase to more than $510 because producers will take the opportunity to recover all the tax revenue as well as a little extra D. The market price of purses will increase to $510 because of the tax ($500 + $10 tax $510)
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Home » Business » If supply and demand are neither perfectly elastic nor inelastic (i. e. supply slopes upward and demand slopes downward), what will be the effect of a tax of $10 on the market for luxury purses that sell for $500? A.