If an Excise Tax Is Placed on a Product That

question 133

Multiple Choice

If an excise tax is placed on a product that has a perfectly inelastic demand, then:

• A) the entire tax will be paid by the consumer.
• B) the entire tax will be paid by the producer.
• C) the consumer and producer will each pay a share of the tax.
• D) the incidence of the tax cannot be determined unless we know the coefficient of price elasticity of supply.

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Definitions:

Origin Points

Origin points refer to the initial locations or starting places from where goods, services, or journeys begin.

Destination Points

Specific locations to which goods or services are delivered. These can include retail locations, warehouses, or end-customer addresses.

Stepping-stone Method

A mathematical technique used in linear programming for optimizing transportation costs by evaluating possible routes or changes within a transportation tableau.

Northwest-corner Rule

A method used in transportation problem in operations research, where solution starts from the northwest corner of the cost matrix and progresses.