Let the Price Elasticity of Supply for a Good Be

question 131

Multiple Choice

Let the price elasticity of supply for a good be 2.0, and the absolute value of the price elasticity of demand be 1.5. Which of the following is TRUE in this case?

• A) Producers carry the majority of the tax burden.
• B) Consumers carry the majority of the tax burden.
• C) Producers and consumers carry an equal amount of the tax burden.
• D) Consumers carry the entire tax burden.