If Demand for a Product Is Perfectly Inelastic, a Tax

question 120

Multiple Choice

If demand for a product is perfectly inelastic, a tax of $1 per unit imposed on sellers will

• A)not affect the market price of the product.
• B)cause the market price to rise by $1 per unit.
• C)cause the market price to decline by $1 per unit.
• D)cause the market price to rise by less than $1 per unit.
• E)none of the above

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Definitions:

Physiological Needs

Basic physical requirements for human survival, such as food, water, shelter, and sleep, posited as the foundation of Maslow's hierarchy of needs.

Abraham Maslow

A psychologist best known for creating Maslow's hierarchy of needs, a theory in psychology explaining human motivation.

Total Quality Management

A management approach focused on continuous improvement of processes in products and services, aiming for long-term success through customer satisfaction.

Decision-Making Power

The authority to make choices or determine courses of action within an organization or group, often held by leaders or decision-makers.