A Tax Is Imposed on Orange Juice

question 55

Multiple Choice

A tax is imposed on orange juice. Under what circumstance will consumers bear the full burden of this tax?

• A) when the supply curve for orange juice is perfectly inelastic
• B) when the price elasticity of demand for orange juice equals 1.4
• C) when the demand for orange juice is perfectly elastic
• D) when the demand for orange juice is unit elastic

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Definitions:

Management's Support

The assistance and backing provided by a company's leadership towards employees or initiatives, promoting a positive and enabling environment.

Research Hypotheses

Proposed explanations made on the basis of limited evidence as starting points for further investigation into the relationships between variables.

Independent Variable

The independent variable is a variable in an experiment or model that is manipulated or changed to observe its effects on a dependent variable.

Distribution

Refers to how values in a data set are spread or dispersed, indicating the frequency of each value or range of values.