If the Demand for a Product Is Perfectly Inelastic, the Incidence

question 26

Multiple Choice

If the demand for a product is perfectly inelastic, the incidence of an excise tax will be

• A) entirely on the buyer.
• B) mostly on the buyer.
• C) entirely on the seller.
• D) mostly on the seller.

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Definitions:

P

A probability value that reflects the likelihood of obtaining test results at least as extreme as the results actually observed, during the assumption that the null hypothesis is correct.

z

A statistical measure that represents the number of standard deviations a data point is from the mean.

Normally Distributed Random Variable

A variable that follows a Gaussian distribution, characterized by its bell-shaped curve, where the mean, median, and mode are all equal.

Mean

The arithmetic average of a set of values or distribution.