Neco 2020 Government Question 3
Practice objective / multiple choice question 3 from the 2020 Neco Government examination.
A country imposes a \(15\%\) ad valorem tariff on imported cars. Before the tariff, the price of a car is \(\$20,000\) and the annual quantity demanded is \(50,000\) cars. The price elasticity of demand for cars is \(-1.5\). Assuming the tariff raises the consumer price by the full amount of the tariff and that the elasticity estimate applies, calculate the total tariff revenue collected after the tariff is imposed. Express your answer in millions of dollars to two decimal places.
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About This Question
This is Neco 2020 Government Question 3. It is one of the objective questions from the 2020 Neco Government examination.
Difficulty level: Hard .
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