Question

Suppose that government officials in Arkansas decide to repeal the tattoo tax (assume that the demand for tattoos is fairly elastic). If this tax is eliminated, we would expect the consumer surplus to

Answer 1

Answer:

Consumer surplus will increase

Explanation:

Consumer surplus is the difference between the price that consumers pay and the price that they are willing to pay( the price that is paid to get it).

Consumer surplus reflects the amount of gain consumers receive when they buy product and service. In this case study since the tax is removed , there will be increase in the numbers of consumer seeking to get tattoos because the amount for the service have been reduced