If a Tax Is Placed on a Good in a Market

question 45

True/False

If a tax is placed on a good in a market where supply is perfectly inelastic, there is no deadweight loss and the sellers bear the entire burden of the tax.

---

Definitions:

Gravity

A fundamental force of nature that causes all things with mass or energy to be attracted to one another, keeping planets in orbit around stars and forming the structure of the universe.

One-Way Flow

A system or process in which resources or materials move in a single direction without recirculation or return to the starting point.

Limiting Factor

An environmental condition that restricts the growth, abundance, or distribution of an organism or a population within an ecosystem.

Terrestrial Ecosystems

are ecosystems found on land, characterized by diverse biotic communities interacting with the abiotic environment.