A good rsquo s demand is perfectly elastic The government imposes a Rs 10 per unit of tax on the goo...........

Economic Affairs Tax System

A good’s demand is perfectly elastic. The government imposes a Rs 10 per unit of tax on the good. It will:

Increase its price by Rs 10 per unit.

Increase its price by more than Rs. 10 per unit.

Increase its price by less than Rs. 10 per unit.

Not increase its price at all.

4th option is correct.

A good’s demand is perfectly elastic. The government imposes a Rs 10 per unit of tax on the good. It will not increase its price at all.

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