Explain how a seller can determine whether the demand for his or her good is inelastic, elastic, or unit elastic between two prices. Suppose the current price of gasoline at the pump is $1 per gallon...

Explain how a seller can determine whether the

demand for his or her good is inelastic, elastic, or unit

elastic between two prices.

Suppose the current price of gasoline at the pump is $1

per gallon and that 1 million gallons are sold per month.

A politician proposes to add a 10-cent tax to the price

of a gallon of gasoline. She says the tax will generate

$100,000 tax revenues per month (1 million gallons

$0.10 $100,000).What assumption is she making?