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Why would elasticity of demand be important

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Reference no: EM132851805

Question 1: What effect would a rule stating that university students must live in university dormitories have on the price elasticity of demand for dormitory space? What impact might this in turn have on room rates?

Question 2: You are chairperson of a state tax commission responsible for establishing a program to raise new revenue through exercise taxes. Why would elasticity of demand be important to you in determining the products on which the taxes should be levied?

Reference no: EM132851805

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