If the Demand for a Good Is Highly Inelastic, a Tax

question 182

Multiple Choice

If the demand for a good is highly inelastic, a tax on the good

• A) places the burden of the tax equally on buyers and sellers
• B) permits sellers to pass most of the cost increase resulting from the tax on to the consumers of the product
• C) reduces the profits earned by sellers since they must write the check to pay the tax
• D) makes the demand more inelastic
• E) makes the demand more elastic

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Definitions:

Order Fill Rate

A measure of supply chain efficiency that indicates the percentage of customer orders that are fulfilled without backorders or stockouts.

Safety Inventory

Extra inventory held to guard against uncertainty in demand or supply.

Product Availability

The extent to which goods are in stock and ready for sale or delivery at any given time.

Echelon Inventory

The inventory held across different stages or levels of the supply chain, from raw materials to final products, to meet downstream demand.