Determine the formula for elasticity


If the government were to increase taxes on gasoline, discuss what will happen to the total government revenue? Why? What are you assuming about the elasticity of the demand curve of gasoline? Determine the formula for elasticity? Would the government make more tax revenues taxing airline tickets instead? Why or why not? Explain what assumptions are you making about the elasticity of airline tickets? Make sure to graph the demand curve for both gasoline and airlines.

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Macroeconomics: Determine the formula for elasticity
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