Suppose That a $0

question 189

Multiple Choice

Suppose that a $0.75 tax is placed on gasoline. Under what circumstances will gasoline sellers end up shouldering the full burden of the tax?

• A) if supply is perfectly inelastic and demand is downward-sloping
• B) if demand is perfectly inelastic and supply is upward-sloping
• C) if supply is upward-sloping and demand is perfectly elastic
• D) The consumer and the seller always share the burden of the tax.

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