If the Demand for a Good Is Very Price Elastic

question 204

Multiple Choice

If the demand for a good is very price elastic, the imposition of a tax on that good

• A) places the largest portion of the burden on the sellers of that product
• B) places the burden of the tax equally on buyers and sellers
• C) places the largest portion of the tax on consumers
• D) will make demand more elastic than it was before the tax
• E) will make demand more inelastic than it was before the tax

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Definitions:

Statutory Assignment

Refers to the legal transfer of rights from one party to another as prescribed by statute.

Statutory Assignment

The transfer of legal rights from one party to another under the terms of a statute or law.

Windfall

An unexpected gain or advantage, often in the form of money or goods, that is not anticipated or earned through work.

Separate Contractual Obligation

An independent commitment within a contract, not reliant on the performance or fulfillment of other obligations within the same agreement.