Decrease in air passenger duty becomes effective in November.

Sites to Visit for More Information:

1. Consumers’ Association
2. HM Customs & Excise
3. Federation of Tour Operators

Questions:

1. Describe the price elasticity of demand for a European holiday.
2. What happens to the equilibrium quantity and the price of a European holiday when air passenger duty is increased?
3. Who pays the air passenger duty? Show your answer on a demand-supply diagram.
4. Is an air passenger duty an efficient tax?

Chapters: 4, 6

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