When a Good with Equally Elastic Demand and Supply Is

question 165

Multiple Choice

When a good with equally elastic demand and supply is taxed,the incidence of the tax is borne

• A) entirely by consumers.
• B) entirely by producers.
• C) by both consumers and producers.
• D) mostly by consumers.
• E) mostly by producers.

---

Definitions:

Cash Basis

A financial recording technique that only acknowledges income and expenditures upon the actual receipt or disbursement of cash.

Revenue Recognition

The accounting principle that dictates the specific conditions under which income is recognized by an entity.

Accrual Basis

An accounting method that records revenues and expenses when they are earned or incurred, regardless of when the cash transaction happens.

Revenue Recognition

The accounting principle that determines the specific conditions under which revenue is recognized and recorded in the financial statements.