If the Elasticity of Demand Is Much Greater Than the Elasticity

question 46

Multiple Choice

If the elasticity of demand is much greater than the elasticity of supply,an excise tax levied on the suppliers will

• A)cause the suppliers to incur a greater burden of the tax than demanders
• B)cause the demanders to incur a greater burden of the tax than suppliers
• C)the burden of the tax will be shared equally between the suppliers and the demanders
• D)cause the entire burden of the tax to rest on the demanders
• E)Without more information as to the amount of the excise tax,who will incur a greater burden will be unclear

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