If the Demand for Bread Is More Elastic Than the Supply

question 158

Multiple Choice

If the demand for bread is more elastic than the supply of bread,which group will bear more of the incidence of a tax on bread?

• A) consumers
• B) the government
• C) neither consumers nor producers
• D) producers
• E) both consumers and producers equally

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Definitions:

Estimated Liabilities

Obligations or debts that a company expects to incur but has not yet quantified with certainty.

Note Payable

A written agreement where one party promises to pay another party a definite sum of money at a certain date or on demand.

Interest Paid

The amount of money paid by a borrower to a lender in return for the use of borrowed money.

Short-term Note Payable

A debt obligation payable within a short period, typically one year or less, representing borrowed funds that need to be repaid.