Suppose the Demand Curve for a Good Is Highly Elastic

question 33

Multiple Choice

Suppose the demand curve for a good is highly elastic and the supply curve is highly inelastic. If the government taxes this good,

• A) buyers and sellers will each share 50 percent of the burden, regardless of the elasticities of the demand and supply curves.
• B) sellers will bear a larger share of the tax burden.
• C) the distribution of the burden will depend upon whether the buyers or the sellers are required to send the tax to the government.
• D) buyers will bear a larger share of the tax burden.

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Definitions:

Title

A formal document representing a right to ownership or a legal right to a property or asset.

Athletic Shoes

Footwear designed for sports or other forms of physical exercise, offering varying levels of support, durability, and performance enhancements.

Warehouse Receipt

A document that provides proof of ownership of commodities (e.g., merchandise, grains, or metals) stored in a warehouse.

Bill Of Lading

A bill of lading is a legal document issued by a carrier to a shipper, detailing the type, quantity, and destination of the goods being transported.