If a Tax Is Imposed on a Market with Inelastic

question 26

Multiple Choice

If a tax is imposed on a market with inelastic demand and elastic supply:

• A) buyers will bear most of the burden of the tax.
• B) sellers will bear most of the burden of the tax.
• C) the burden of the tax will be shared equally between buyers and sellers.
• D) there is no way to determine how the burden of the tax will be shared.

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