What should be die ratio of cable tax to the satellite tax

Reference no: EM131490631

Question: According to estimates by Goose and Pepin [2004], the elasticity of demand for basic cable service is -031, and the elasticity of demand for dint broadcast satellites is -740. Suppose that a community wants to raise a given amount of revenue by taxing cable service and the use of direct broadcast satellites. If the community's goal is to raise the money as efficiently as possible, what should be die ratio of the cable lax to the satellite tax? Discuss briefly the assumptions behind your calculation.

Reference no: EM131490631

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