Elasticity plays a large role in tax incidence. Which of the following is most true regarding a tax on consumers with perfectly inelastic demand? A) consumers and producers will share the tax equally. B) Consumers will pay the entire tax. C) Consumers will pay for 1/3 of the tax. D) Producers will pay the entire tax.

Elasticity plays a large role in tax incidence. Which of the following is most true regarding a tax on consumers with perfectly inelastic demand? A) consumers and producers will share the tax equally. B) Consumers will pay the entire tax. C) Consumers will pay for 1/3 of the tax. D) Producers will pay the entire tax.

Microeconomics A Contemporary Intro

10th Edition

ISBN:9781285635101

Author:MCEACHERN

Publisher:MCEACHERN

Chapter5: Elasticity Of Demand And Supply

Section: Chapter Questions

Problem 13PAE

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