In a Market Where Supply and Demand Are Equally Elastic,producers

question 2

Multiple Choice

In a market where supply and demand are equally elastic,producers and consumers will share equally the burden of a tax because

• A) producers will simply raise the price of their output in response to the tax.
• B) consumers will buy less of the good in question once the tax is imposed.
• C) the tax is more likely to be paid out of pocket by producers.
• D) the government doesn't care who pays the tax as long as the revenue is collected.
• E) both have equal ability to change their behavior in response to the tax.

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Definitions:

Standard Normal Variable

A normalized random variable that has a mean of 0 and a standard deviation of 1.

Standard Deviation

A measure of the amount of variation or dispersion in a set of values, indicating how much the values in a dataset deviate from the mean.

Normal Distribution

A bell-shaped distribution curve that is symmetrical about the mean, describing how random variables are distributed.

Discrete

Refers to a variable that can take on a finite or countably infinite set of distinct values.