Assume the Demand for Automobile Tires Is Highly Elastic and That

question 254

Multiple Choice

Assume the demand for automobile tires is highly elastic and that the supply is highly inelastic. The burden of a $2 excise tax on each tire will be

• A)borne by resource suppliers that provide the inputs for manufacturing tires.
• B)shared about equally by buyers and sellers of tires.
• C)borne primarily by sellers of tires.
• D)borne primarily by buyers of tires.

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