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Taxation as a Tool

The slope of ...

Question

The slope of demand curve is ____ in case of inelastic demand.

A

flatter

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B

steeper

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C

horizontal

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D

vertical

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Solution

The correct option is B steeper
The slope of demand is steeper in case of relatively inelastic demand the price may increase or decrease but the quantity demanded will near about remain the same. This means that the % change in quantity demanded is less than the % change in price. Hence, the curve is steeper.

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