Assuming the Demand Curve Is More Elastic (Flatter) Than the Supply

question 26

Multiple Choice

Assuming the demand curve is more elastic (flatter) than the supply curve, which of the following is true ?

• A) The full tax is always passed to the consumer no matter how flat (elastic) the demand curve is.
• B) The full tax is always passed to the seller no matter how flat (elastic) the demand curve is.
• C) The smaller the portion of a sales tax that is passed to the consumer.
• D) It does not make any difference how flat (elastic) the demand curve is; the tax is always split evenly between buyer and seller.

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