A government regards alcoholic drinks as a demerit good and introduces a minimum price above the equilibrium in an attempt to protect consumers. Demand for alcoholic drinks is price inelastic.
What is the most likely outcome?
1 )
a fall in the revenue of alcoholic drink producers
a fall in the quantity of alcoholic drink sales
3 )
a long-run shortage of alcoholic drinks
4 )
an increase in specific tax revenue from the sale of alcoholic drinks
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