Suppose Supply Is Perfectly Inelastic, While Demand Is Relatively Elastic

question 125

Multiple Choice

Suppose supply is perfectly inelastic, while demand is relatively elastic.A tax of $1.00 is levied on the purchasers of the good.Which of the following statements is correct?

• A)the government will fail to raise any tax revenue
• B)there will be a positive deadweight loss
• C)there will be no deadweight loss
• D)government revenue will be less than the deadweight loss of the tax.

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Definitions:

Six-Carbon Glucose

Six-carbon glucose is a simple sugar and primary energy source for cells, central to cellular respiration and metabolic processes.

Three-Carbon Molecules

Organic compounds composed of three carbon atoms, which are fundamental building blocks in organic chemistry and biochemistry.

Pyruvate

Pyruvate is a key end-product of glycolysis and serves as an important intermediary in several metabolic pathways, including the Krebs cycle.

Aerobic Metabolism

The process of producing cellular energy involving oxygen. It's more efficient than anaerobic metabolism and takes place in the mitochondria of cells.