Explain how the gasoline has an inelastic demand

Reference no: EM13245174

The mayor of Wappingers Falls was told by your Microeconomics class that gasoline has an inelastic demand and raising the price of an inelastic product raises revenue. The mayor wants to raise town revenues and decides to raise taxes on gasoline in Wappingers Falls. The mayor finds out that after she raised gasoline taxes, the tax revenue FELL instead of increasing. Now she blames your class on giving her wrong advice. Where did she go wrong? How would you defend yourself?

Reference no: EM13245174

Questions Cloud

What is the wavelength of the light in the water : Light of wavelength 420 nm is incident normally on a film of water 1.0 µm thick. The index of refraction of water is 1.33, What is the wavelength of the light in the water

What should be the new price which can achieve the goal : The federal government estimated that the elasticity of demand for cigarettes among teenagers is equal to 2. If they want to reduce smoking by 50% among this group and the price of cigarettes is $6.00 per pack,

Explain titration of a solution of the extremely weak acid : In the titration of a solution of the extremely weak acid, HCN (Ka = 6.2 x 10-10), by a solution of sodium hydroxide of equal concentration,

What is the difference (r+)-(r-) between the two rates, : An unstable elementary particle comes in two varieties, one with positive and one with negative electric charge, What is the difference (R+)-(R-) between the two rates, with its error

Explain how the gasoline has an inelastic demand : The mayor of Wappingers Falls was told by your Microeconomics class that gasoline has an inelastic demand and raising the price of an inelastic product raises revenue. The mayor wants to raise town revenues and decides to raise taxes

What is the current i : Two insulated wires, each 2.94 m long, are taped together to form a two-wire unit that is 2.94 m long. One wire carries a current of 8.36 A, What is the current I

Who will pay each for the commuter service : Jane quit her job at IBM where she earned $50,000 a year. She cashed in $50,000 in corporate bonds that earned 10% interest annually to buy a mini-bus. Jane has decided to buy the mini-bus and set up a commuter service

Explain ethanol to produce carbon monoxide and water : What is the theoretical yield (in mol) of carbon monoxide when 2.62 mol oxygen reacts with 2.08 mol of ethanol (CH3CH2OH) to produce carbon monoxide and water

Calculate the interquartile range : Calculate the interquartile range and construct the less then give

User Account

All Pages