The Change in a Product's Price When a Per-Unit Tax

question 148

Multiple Choice

The change in a product's price when a per-unit tax is assessed on producers is greatest when

• A)demand is very flat (elastic) and supply is very steep (inelastic).
• B)both demand and supply are very steep (inelastic).
• C)both demand and supply are very flat (elastic).
• D)supply is perfectly inelastic.
• E)demand is very steep (inelastic) and supply is very flat (elastic).