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Federal transportation administration

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Reference no: EM132022432

Federal Transportation Administration has introduced a new tax on train travel. There are two types of travelers by train, business travelers and leisure travelers. The former have a price elasticity of demand of -1.2; the latter have a price elasticity of demand of -3. Which type of traveler will bear the larger burden of the tax? Briefly explain your reasoning.

Reference no: EM132022432

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