Government and the Economy
Question 1 of 30
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A government imposes a per unit tax on a good with relatively inelastic demand and relatively elastic supply. Which outcome is most likely in the long run?
Select one option.
A
Producers bear most of the tax burden because supply is elastic
B
Consumers bear most of the tax burden because supply is elastic
C
The tax burden is shared equally regardless of elasticities
D
The tax creates no deadweight loss because it raises revenue
E
Consumers bear most of the tax burden because demand is inelastic
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